BSNL’s downslide: Losing both Money & Market Share - Factly
Sai Krishna Muthyanolla
August 26, 2015
The State owned Telecom major Bharat Sanchar Nigam Limited (BSNL) has been on the downslide for quite some time now. It is losing both revenue & market share to private players. While reasons are many, its inability to invest in infrastructure & promotion has costed it dearly. It is losing market share every year and accumulating losses.
The state owned Bharat Sanchar Nigam Limited (BSNL) provides services to 98% of the villages in the country through its Village Public Telephone (VPT). No other Telecom Service Provider can even come close to that number. Notwithstanding these numbers, the state owned BSNL is on the downslide without any sign of recovery. Over the last few years, it has been losing both money & market share in all telecom services (Landline, Mobile & Broadband).
BSNL in continuous losses
BSNL made a loss of 7265 crore rupees in 2014-15 compared to the 7019 crore loss it made in 2013-14.  The losses in 2012-13 were 7884 crore rupees.
BSNL was in profit of 5977 crore rupees in 2003-04 and continued to remain in profit till 2008-09.  But things started changing after that. The revenues are declining because of decreased market share and increasing expenditure. According to the Government, BSNL has been unable to invest in expansion of its network over the period 2009-2013.   Declining Market Share
BSNL has been losing its market share in all the three domains (Landline, Mobile & Broadband). Landline has been BSNL’s mainstay all these years. Even here, it is slowly losing ground to private players like Airtel & TATA. From more than a 2/3 market share (68%) in 2012-13, the market share has come down to 62% in 2014-15.
In the Mobile connections domain, BSNL has always been playing catch up with private players like Airtel & Vodafone. While both these private players have been increasing their market share every year, BSNL has been losing its share of this market. From 11.7% in 2012-13, its share is down to 8% in 2014-15. During the same time, Airtel increased its market share from 21.7% to 23.3% while Vodafone’s market share also went up from 17.6% to 19%. Few other private players like Reliance & TATA also lost their market share while Idea increased its market share.
In broadband also, BSNL’s market share went down from 16.1% in 2013-14 to 10.6% in 2014-15, a decline of more than 30%. Going with the trend in other domains, both Airtel & Vodafone increased their market share. Airtel currently holds 1/4 of the share in the broadband space.
Losing Customers & Quality
In the last four years alone, BSNL has lost close to 78 lakh landline customers & 6.5 lakh mobile customers. If this loss alone is not enough, BSNL also ranked low on the Quality of Service (QoS) parameters and benchmarks laid down by Telecom Regulatory Authority of India (TRAI).
TRAI has laid down the Quality of Service (QoS) parameters and benchmarks for both landline and mobile telephone service. TRAI has been monitoring the performance of service providers, against the quality of service benchmarks for the various parameters through Quarterly Performance Monitoring Reports.  The performance on call drop is accessed through two parameters viz. call drop rate (benchmark  ≤ 2%) and worst affected cells having more than 3% drop (benchmark  ≤ 3%).
As per the performance monitoring report for 2G services, for the quarter ending March 2015, the performance of BSNL is poor in both downtime & call drops. For 3G services for the quarter ending March, 2015, the performance of BSNL is poor in call drop.
Government’s Reasons
Government sources cite reasons like power supply problems, disruptions due to cable cuts arising from road development works, breakdown of cables due to old legacy network of basic service, cable theft etc as the reasons for loss in market share leading to the loss in revenue.
As per the government, the reasons for decline in mobile connections are mainly due to inadequate investment leading to network coverage issues, inability to compete with private sector on the customer services and marketing.
What is it doing to arrest the downslide?
According to the Government, BSNL has been taking the following steps to arrest the downslide. It is taking the following steps to address quality issues and attract customers back into its fold.
BSNL is augmenting 15 million lines and expanding its mobile network progressively to enhance coverage capacity and to further improve the Quality of Service (Qos).
Steps to attract Customers
BSNL has also taken the following initiatives to attract customers.
Is this enough?
To compete with private players that spend a large chunk on promotion, BSNL also should promote its products aggressively while working on enhancing quality. It has been spending less than 0.5% of its revenue in advertising while private players spend a lot more than this.  While the CMD of BSNL is confident of getting BSNL back to the green by 2018-19, it looks highly improbable for now.