State-run Bharat Sanchar Nigam Ltd. (BSNL) is in deep financial crises. However, its management is trying to come-up with ways to curtail the surmounting losses and ensure that the public sector telecom service provider survives. With losses piling up and the company unable to generate enough revenue to even sustain itself, it appears that BSNL may run the risk of going bankrupt. Fortunately, the government has stepped up to revitalize the telecom company.
It is said that the company is likely to restrict its annual losses in the year ended March 31st to about Rs 8,100 Crores (US$ 1.33 Billion). But, it will be possible only because of income-tax refund and a marginal dip in running and recurring costs of infrastructural and personnel salaries, made possible by routine Voluntary Retirement Schemes (VRS). Just last week, an empowered Group of Ministers (GOM) were in talks to come up with a Rs. 15,000 Crores (US$ 2.4 Billion) Bailout Package for both BSNL as well as MTNL.
As the trends have shown, Voice and SMS, which have been the winning services have started to lose their appeal and effectiveness. The next phase of financial growth is undoubtedly Data based services like VoIP, Video Conferencing, Internet based messaging services and other data intensive tasks which users are routinely resorting to.
BSNL will now have to step up its game with the pricing and tariffs making it a much more attractive proposition to the subscribers. The company could very well start a price-war to attract its users and ensure they get hooked on to data based services that run on BSNL’s mobile internet. The process might be slow, but the company will have to implement some pretty solid customer retention and service augmentation processes if it hopes to crawl out of this financial debacle.
What do you think?