Was BSNL lagging?
The public sector mobile service provider company has certainly seen much better days when there were very few players & the company had the advantage of spreading far & wide without worrying about revenue. However, with the arrival of highly competitive players whose intentions were quite dynamic & actions more so, BSNL has been slowly falling behind, both in number as well as Average Revenue Per User (ARPU).
BSNL blames its present quandary for two reasons: One of the heaviest hitting reasons is the excessive expenditure on salaries shared the MD, “BSNL is spending 52% of its capital in employees’ salaries as compared to other competitive companies who are just spending 5–6%”. Such variance immediately puts a big dampener on the expansion plans & sustainability of the entire operation. While it isn’t easy to subdue this huge overhead, BSNL has apparently appealed & waiting the Government’s approval to liberally offer large-scale Voluntary Retirement Schemes (VRS) to present employees & minimize the recurring burden.
The other reason cited for its retarded growth pattern was the inability to procure & deploy equipment & hardware. Surprisingly, the company who once begged for funds from the Government is now awash with them as it is in the process of huge procurements revealed Upadhyay, “We lagged behind other private companies, as we could not purchase the required equipment in the last 4-5 years due to many reasons. Now everything is okay and tenders to purchase has been floated. BSNL has planned a Rs. 40,000 Crores (US$ 6.7 Billion) capital for the purpose.”
BSNL has been doing some exceptional expansions in the remote & many a times, undesired regions of the country & now holds a strategic advantage of absorbing newly generated customers. However, it will have to move swiftly with attractive tariffs to diminish the impact & lure of the private companies. What do you think?