Can BSNL survive the competition?
By Binu Paul, SiliconIndia   |   Wednesday, 02 March 2011, 14:07 IST   |    38 Comments
Printer Print Email Email
Can BSNL survive the competition?
Bangalore: Ever since the arrival of private telecom service providers after the liberalization of Indian economy in 1991, the state-owned Bharat Sanchar Nigam Ltd(BSNL) has been desperately looking for measures to keep its customer base intact. The company has not been able to grow in line with the market and has been steadily losing its market share. BSNL which is the forefront provider of telephony services in rural India, is gradually losing it's market share to leading private operators. The company started the PCO revolution in the country and took the mammoth task of providing telephony service in the rural India which was then a nonviable business for the private providers. Now with the wireline services taking a backseat and wireless is flourishing, BSNL's wireless service's growth has been declining despite its very low tariffs. In December 2009, BSNL had 22.4 million rural subscribers, as compared to 20.9 million in September 2009 which was only a 7 percent growth. Airtel had 43.2 million subscribers in December 2009, as compared to 38.5 million in September that year, scoring a 13 percent growth. Vodafone also registered an 11 percent growth in the same period. The process of selecting a Chairman & Managing Directors (CMD) of BSNL and MTNL is still on. The new search-cum-selection panel scrapped the earlier list and invited applications for the posts. The old committee had come under controversy as BSNL employees Union challenged the process and selection made by old search panel in the Delhi High Court. The government then formed a new panel with Sam Pitroda as the lead and included UIDAI Chairman Nandan Nilekani, T K Nair, Principal Secretary to Prime Minister and Cabinet Secretary K M Chandrashekhar in the panel. Adding to its woes, the recently introduced Mobile Number Portability (MNP) has hit hard at BSNL and MTNL. BSNL's subscriber base declined by 131,581 customers while MTNL lost nearly 5,869 customers after MNP was introduced. In an effort to arrest the erosion in their user base, both the companies have come up with measures to address customer grievances and improve service quality apart from additional incentives to distributors and retailers. Lack of concentration or the unbearable slowness on addressing customer grievances have also led to the loss of customer base in urban areas. While the private players give upmost importance to satisfaction, a response from the BSNL customer cell would take days to reach the customers. This has forced many users to opt for private providers. BSNL had engaged the service of The Boston Consulting Group (BCG) to help develop an overall strategy and transformation plan for the organization. According to BCG's revival plan, the telecom operator has decided to focus on four key operations such as consumer mobility, broadband, enterprise business and new business which includes infrastructure sharing. Apart from the above aspects, BSNL also has to find ways to change its typical style of operation as a state-run organization, slow in processing customer request and implementation of policies, inefficiency, high level of bureaucracy, and the heavy unionism. It has to find ways to retain its number one position in the market and the trust of its customers by providing prompt, efficient, and courteous service. The firm also should identify the product changes needed to give it a competitive edge in the market with quality products and services at fair and reasonable rates. It should establish an efficient business processes enabled by strong IT backup. The company should create a team of excellent capacity to lead the marketing, sales and distribution of its products. It should also work on more interesting and result oriented promotional activities to expand its mobile network and rural reach. Appropriate career planning and training should be given to its employees and should readdress their grievances to create a conducive work environment with strong focus on performance.

siliconindia