The Indian telecom sector is ‘evolving’ despite several challenges it is facing. It is in the middle of a transition from 4G to 5G, satellite communication is becoming a reality, and competition is getting more broad-based. Rakesh Kumar caught up with Minister of State for Communications Pemmasani Chandrasekhar to get an overall view of the sector. An excerpt:
BSNL has been profitable for the last two consecutive quarters. How did you make that possible?
There is a lot of work going on inside BSNL. We have installed close to 100,000 4G towers in the last 12 months, and around 70,000 of them are active now. All these towers are performing better. So, obviously, we are increasing the customer base. There is a component of that. There is also a component of spending control, and overall efficiency is being improved at BSNL. All these factors have culminated in profitability, but the profit is around Rs 250 crores. That's not our target; it's actually just a tipping point. If the 4G rollout goes according to our plan, ideally, we should be generating a lot more revenue and expanding our customer base.
When are you going to stop BSNL subscriber churn?
We are gaining subscribers every month. One major limitation is that BSNL only has 100,000 4G towers. If you look at Reliance and Airtel, they have over 500,000–600,000 towers. After completing installation of 100,000 4G towers, we are going to request approval from the Cabinet for another 100,000 towers. We are focusing on increasing cash flow. Once we boost the cash flow, we will inherently have the opportunity to install more 4G and 5G equipment. We are also monetizing BSNL’s assets, which will provide additional funding.
The government has already given licenses to Starlink and two other satellite players. When will the services start?
Granting licenses is our responsibility. The rest is up to Starlink and when they decide to start. I am pretty sure they want to begin as quickly as possible, especially since their basic infrastructure has already been set up. However, it is important to remember that Starlink isn’t going to bring millions and millions of customers into the fold. It will play a minor role compared to the rest of the telecom infrastructure. That’s because it is expensive, and there will be speed issues.
Satellite communication is important as a backup and for some rural areas, where entrepreneurs and others who need a stable and decent connection could benefit. In those areas—like maritime zones and other remote regions—satellite could be very helpful, but it’s more of a complementary solution in the overall telecom ecosystem.
There were complaints from telcos that satellite services will eat into their business in India.
It won’t be like that. It will be a bit more expensive compared to terrestrial networks. The speed of satellite internet is much slower than that of terrestrial networks. Besides, satellite internet is not intended for mobile services; it’s only for internet service, at least for now. Satellite communication will function more as a backup rather than a primary service.
So last year, all the telcos increased their tariffs. Are we expecting more increases this year?
If you look at the overall cost, we are much, much cheaper compared to the rest of the world. Obviously, the companies have invested heavily in 5G, and now all these companies are publicly listed, so they have their own concerns regarding growth. But at the same time, if there is effective competition—whether it’s Vodafone Idea or BSNL—pricing will naturally come back to a more normal level. The key here is to ensure at least three or four highly effective players remain in the market.
There are questions about the quality of services provided by telcos in the country.
We are taking a closer look at the quality of service in the country now. We used to monitor and report on a quarterly basis, but now we’ve changed it to monthly reports. Previously, we monitored at the cell tower (BTS) level. Now, each BTS has 12 cells, so we are monitoring at the cellular level. The intensity and depth of this quality of service monitoring have been revamped.