BSNL revival plan: Long road ahead

Experts feel BSNL should adopt 5G if it wants the revival plans to be successfully executed

Published: 07th August 2022 07:55 AM  |   Last Updated: 07th August 2022 07:55 AM   |  A+A-

BSNL (File photo)

BSNL (File photo)

Express News Service

NEW DELHI:  The government’s decision to infuse ₹1.64 lakh crore in state-owned Bharat Sanchar Nigam Limited (BSNL) is probably the easiest part of its attempt to revive the ailing telecom company. Because what lies ahead is probably the toughest, if not an improbable task. To be the fourth player in what looks like an already crowded telecom industry is not the most comfortable situation to be in. The industry is going through disruptions – both in terms of competition and technology -- and BSNL can’t afford to be behind the curve despite the government’s cash if it has to have any chances of survival.

Telecom sector experts feel BSNL will have to quickly adopt 5G technology if it wants the ₹1.64-lakh-crore revival plans to be successfully executed. The loss-making BSNL’s 5G leap shouldn’t be delayed as happened with its 4G leap, they added.  “Other operators are on the verge of launching 5G services and are expected to have adequate coverage (at least in prime areas) in another 3-4 years. Therefore, BSNL will soon have another technology cycle to catch up. And hopefully, BSNL’s 5G leap will not be as delayed as its 4G leap if revival plans work out successfully,” said Charu Paliwal, Research Analyst, Counterpoint Research.

Long winding road ahead

To give a lifeline to the ailing telco, the government recently approved a ₹1.64 lakh crore package. The relief package will be utilized to de-stress the BSNL’s balance sheet, expand its fibre reach and improve the quality of the company’s services. With this package, the government expects the state-owned telco to be a profitable entity in the next three years. Also, the government believes the company will be in a position to give competition to the private and established telecom operators like Reliance Jio, Bharti Airtel and Vodafone Idea.

“The 2019 relief package gave BSNL a lifeline. The package helped BSNL in becoming operationally profitable. With the latest relief package, we expect BSNL to become net profitable in the next three-four years,” said telecom minister Ashwini Vaishnaw while announcing the package. BSNL chairman Pravin Kumar Purwar also sounded optimistic about the company’s future growth.

“Out of the total ₹20,000 crore revenue, we annually get ₹3,000 crore from rural and rest of the ₹17,000 we get from urban and semi-urban areas. We get ₹5,500 crore from wireline while ₹7000 crore from wireless,” said Puwar to support his optimism.  However, experts have a different take on it. They believe BSNL can give competition to private telcos in areas such as fixed-broadband and even earn decent revenue in the enterprise segment from small and medium businesses and consumers in rural areas, but that might not be good enough.

“Capital infusion will aid its much-needed 4G launch and network expansion, which is important for its long-term survival. It will help the operator to be in a better position to attract price-sensitive yet data hungry consumers and offer services to areas not yet covered by private players,” says Paliwal of Counterpoint Research.

Capital alone won’t do it

However, not everyone is convinced the package could make much of a difference. Prashanth Tapse, Research Analyst, Senior VP (Research) of Mehta Equities believes that the assumption of making operational profits would be difficult in the competitive environment wherein Bharti and Jio are in a tug-of-war to gain market share.  Moreover, this is not the first revival package by the government to support and transform the stressed telco into a financially viable, sustainable and vibrant player. 
The last package was granted in FY2019 for ₹24,000 crore for 4G upgrade but unfortunately, not allotted due to BSNL technology upgradation delay. The telecom sector being a highly capital-intensive area, BSNL misses the aggressive strategies to get things executed.

Tapse suggests that the government should focus on bringing in high-end technology and a team that can execute the plan of BSNL being a profit-making company.  “And while its competitors are talking about 5G, BSNL is yet to implement 4G technology. For any meaningful turnaround, only monetary support will not be enough, it also needs change in working culture and corporate structure matching industry standards,” added Tapse. There are reasons for this pessimism. The state-owned telco has suffered a loss of ₹50,631 crore in the past five years. And while after the ₹70,000 crore revival package in 2019, the telco turned EBITDA positive (operating profit) in 2020-21, it continues to lose its subscriber base. According to the information provided by the minister of state for communication Devusingh Chauhan, BSNL has lost around 2 crore subscribers in the past five years. 

As per the latest telecom regulator data, BSNL and MTNL together have a market share of only 10% in the wireless segment. In May 2022, the PSU lost around 5 lakh wireless customers. However, the company is doing well in the wireline segment. BSNL and MTNL together held 39.17% of the wireline market share as on 31st May 2022. 


Disclaimer : We respect your thoughts and views! But we need to be judicious while moderating your comments. All the comments will be moderated by the editorial. Abstain from posting comments that are obscene, defamatory or inflammatory, and do not indulge in personal attacks. Try to avoid outside hyperlinks inside the comment. Help us delete comments that do not follow these guidelines.

The views expressed in comments published on are those of the comment writers alone. They do not represent the views or opinions of or its staff, nor do they represent the views or opinions of The New Indian Express Group, or any entity of, or affiliated with, The New Indian Express Group. reserves the right to take any or all comments down at any time.

flipboard facebook twitter whatsapp