Just yesterday the Government of India announced the infusion of 89,000 Cr for the revival of BSNL. In the last four years alone, the government has infused around 322,000 Cr in BSNL. Now if we were to look at the current number of subscribers it stands at 103.68 M (Goyal, 2023), which means per subscriber investment turns out to be ₹31,057, a humongous amount that is next to impossible to recover considering the ARPU of even the private telecom players in India. Even if we take the best ARPU of ₹187 from Airtel, BSNL will need more than 12 years to recover its investment of 322,000 Cr.

BSNL is planning to launch nationwide 4G & 5G services and for the same has given a contract of 26821 Cr to TCS (Kiran Rathee, 2022), which is a strategic investment to build indigenous mobile networking capability but then launching the 4G & 5G so late will not going to attract any new customers it though might slow down the customers exiting from BSNL towards the private players.

With less than 10% of the market share, it’s not prudent to invest too much very well knowing that there’s little chance of getting any significant market share by launching something which the private players are already providing for more than a year.

The area where BSNL will have an advantage is to provide its services in areas that are otherwise not well catered by the private players, but those are generally the areas with significantly low disposable income and hence we must have to see if there are any real willingness from the consumers to switch from 2G & 3G to 4G & 5G.

We can make a case out of all this investment about self-sufficiency, Make in India, etc. But then practically and historically we have seen that any investment in similar Government run enterprises is generally a bad idea due to the sheer unaccountability and incompetency exhibited by the people at the helm of such institutions.

A better way would have been to strike a partnership with the private players to provide services in the areas which are otherwise not a priority for them and route some of the money to them to build such capabilities. There are other incentives and regulations which we can think of like providing the spectrum for discounted rates or for free for certain areas with a requirement that the private players availing such discounts will need to provide their services in areas earmarked by the government. Having 2–3 partners catering to the same area will even build redundancies for certain critical areas like Indian borders, secure defense establishments, and other critical places with a lack of telecom infrastructure.

References

Goyal, Y. (2023, June 8). BSNL Will Stop Losing Users From Oct-Nov, Says Telecom Minister: Report. Retrieved June 8, 2023, from Telecom Talk: https://telecomtalk.info/bsnl-will-stop-losing-users-oct-nov/713332/#:~:text=According%20to%20the%20Telecom%20Regulatory,2023%2C%20with%20103.68%20million%20subscribers.

Kiran Rathee. (2022, 10 11). BSNL’s Rs 26,821 crore deal with TCS to roll out 4G network gets govt nod. Retrieved June 8, 2023, from The Economic Times: https://economictimes.indiatimes.com/industry/telecom/telecom-policy/bsnls-rs-26821-crore-deal-with-tcs-to-roll-out-4g-network-gets-govt-nod/articleshow/95415606.cms