Financial Daily from THE HINDU group of publications
Monday, Oct 21, 2002
Info-Tech - Telecommunications
BSNL not so `mobile' as private sector rivals
NEW DELHI, Oct. 20
BHARAT Sanchar Nigam Ltd (BSNL) intends to make a splash in the cellular mobile market, with the official launch of its countrywide services - - CellOne - - at comparatively lower tariff on Saturday. However, its promise of mopping up four million customers by the end of this fiscal, far from giving the jitters to its competitors in the private sector, has been greeted with the usual scepticism.
The reasons are not far to seek.
Despite the attractive tariff structure, the `public sector' tag attached to BSNL, coupled with its past record on the customer service front, could well deal a severe blow to its ambitions. What is more, its subscriber base in Tamil Nadu, Bihar and Kolkata circles, where it has been offering mobile services for months together now, speaks for itself.
BSNL had launched its mobile services in Kolkata and Bihar in February, and managed a catch of 8,286 and 7,665 subscribers respectively in the first month. The private operators in Kolkata - - Hutch and Bharti - - had a subscriber base of 1,50,082 and 98,500 respectively in the same month.
As per the latest estimates, Hutch has a subscriber base of 2,18,901, Bharti 1,54,482 and BSNL 11,104. In other words, since BSNL entered the Kolkata market, Hutch increased its tally by 68,819 and Bharti by 55,982 subscribers, while BSNL could manage only 2,818.
The story is repeated in Bihar circle, which has just one private operator - - Reliance Telecom. Since February, BSNL could manage to add only 9,613 new subscribers, while Reliance added 20,600.
In Tamil Nadu, where its mobile operations were launched in July, the statistics are even more revealing because Bharti launched its services in the same month in competition to existing players - - Aircel and BPL Cellular. Since then, Aircel has added 10,516 subscribers, BPL 13,958 and Bharti managed to rope in 50,037 new subscribers. In sharp contrast, BSNL's tally reads 1,088.
The performance of Mahanagar Telephone Nigam Ltd (MTNL) in the two "fastest growing markets" of Mumbai and New Delhi, is equally bad.
MTNL launched its cellular services in the two metros in January. Since then, even as the private operators have managed to grow by leaps and bounds, MTNL continues to crawl.
In Mumbai, Hutch added 1,73,214 new subscribers from February to September, followed by BPL Mobile at 1,56,841 while MTNL could add just 27,070 new subscribers. Bharti, which entered the fray in August managed to rope in as many as 1,35,674 customers.
The Delhi experience is ditto. The private operators - - Bharti and Hutch - - managed to add 2,48,647 and 1,82,037 new subscribers, while MTNL could add just 54,180 additional customers from February to September.
Being birds of the same flock, BSNL will only mirror MTNL's performance, but on a much larger scale, the private operators note.
BSNL officials, however, seem confident. They note that being a nationwide cellular service provider and existing fixed line services provider, BSNL, with the common brand name and tariff strategies, will be able to effectively compete with existing cellular service providers in their respective circles.
It remains to be seen who is proved right. Only time will tell.
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