Q. What are your views on the current scenario of the Telecom Industry? A. In the present scenario of the tariff war we have no option but to match the market trend. Free fall in voice call charges undoubtedly has an impact on the revenue. However, we expect that there will be a surge in voice traffic due to reduced rates which will compensate dip in revenue to some extent. As pricing of any service cannot ignore the basic underlying costs on a long run, we are of the opinion that sooner or later, tariffs will stabilise at some sustainable point.

Q. The teledensity in India still remains at very low level compared to the international standards. Moreover, India remains highly underpenetrated in terms of broadband connections? What in your opinion would drive the tele- density and broadband penetration in India?

A. Teledensity in rural areas is around 20% only and no growth can be considered as inclusive growth till the people living in rural and remote areas are able to enjoy the benefits of technology and competition. I feel that Government should provide more incentives to the service providers for penetrating in rural areas.

Q. What are the emerging opportunities in the telecom sector as the economy moves towards recovery mode post the global economic meltdown?

A. The future of telecom sector and how it contributes effectively to the GDP depends upon how effectively convergence is brought about and leveraged. The phenomena of ‘convergence’ in full measure is supported by network architecture known by the name of NGN or Next Generation Networks, which itself has evolved into what is known as IMS or IP Multimedia Sub-system. The IMS architecture allows both fixed and mobile customers to access the same set of common applications.

This not only brings in enormous savings in Capex and Opex but also arms the service provider with the flexibility of offering multiple services covering Voice, Video and Data, reaching out to any customer, with any customer device, using any access. Such a platform can literally host thousands of applications. There-in lies the opportunity to increase the ARPUs for the organisation. These developments in turn generate a huge level of employment in the IT sector and boost the GDP.

Q. Intense competition pressure and cut throat pricing has resulted in declining Average Revenue per User (APRU) of the telecom companies. What should be the potential strategies adopted by BSNL to increase its ARPU?

A. Yes, as the tariff trend is south bound, there is reason to anticipate a further decline in ARPU. With the new players rolling out their network, there is huge supply in the telecom industry. Capacity has surpassed the demand which is resulting in decline in ARPU. Until equilibrium is reached, it is apprehended that the declining trend may continue in the second half in the financial year also. However, at BSNL, we plan to provide 3G services to customers who want attractive features of 3G services like video call, video conferencing, mobile TV, video streaming, high speed data service etc. We have also planned to enhance experience of Value Added Services for existing 2G customers.

The Government / TRAI may think of bringing some regulation to check the predatory tariffs.

Q. BSNL is one of the first movers to roll out the 3G services in India. What are the potential for these services in India and how will BSNL benefit being the early mover in the industry?

A. 3G service was launched on February 27th, 2009 in 11 cities. Presently, the service is available in 261 cities of North & East Zones. In the first phase, we have planned to launch service in 760 cities covering most of the District Headquarters. So far more than 82,000 customers have subscribed to the service. Though initial growth of 3G connections was slow, the response has been encouraging. This is in line with the global trend where the initial uptake has been rather slow but later on the growth picks up. In order to reap the advantages of being the first mover, we are making efforts to popularise the service amongst the customers. Several steps have been taken in this direction by improving the coverage, launching more Value Added Services to enhance 3G experience and rationalising tariff. Migration from 2G subscription to 3G has been made almost free of charge. Handset bundling and Data card bundling have also been done to attract the customers. We are quite hopeful that with these steps being taken by us, our 3G customer base would further swell.

Q. Do you except to implement any substantial innovation growth drivers in the coming years?

A. Broadband, 3G and Value Added Services on Broadband and Mobile services of BSNL will definitely bring substantial growth for the company. At present, value added service contribute approximately 8% of Mobile revenue. With increased focus on mobile broadband and multimedia services on 3G, supported by Mobile Advertising and Mobile Banking & Commerce Services, BSNL’s revenue may get a boost. We have also started sharing our passive infrastructure with other operators which would be another revenue earning stream.

Q. India has crossed the 500 million subscriber base mark for telecom services and there has been an increasing focus on rural market penetration. What are BSNL’s plans for increasing reach in rural markets?

A. BSNL is providing telephone facility in every corner of the country. It has already covered around 95% inhabited villages in the country as per Census 2001. For increasing the penetration in rural market, we are working on various schemes.

Under Bharat Nirman Programme of Government of India, we have to provide 66,822 VPTs and 60,208 villages have already been covered. Remaining villages will be covered during the current financial year. We have also entered into an agreement with USOF for providing VPT facility in 62,443 uncovered inhabited villages and 55% work has been completed. Remaining will be covered progressively in the next 15 months. We have also entered into an agreement with USOF to provide rural phones in 1,267 specified areas (SDCAs). 21.51 lakh rural phones have already been provided under this agreement and efforts are being made to provide more. We have also decided to cover villages having 1,000 and above population by GSM technology and the expansion work is being done progressively.

Q. What are BSNL plans for launch of Wi-MAX?

A. BSNL was the first to launch the wireless broadband services using WiMAX e-enabled technology, in Pisangan, Ajmer (Rajasthan) on 13th December 2009. This unique technology has been deployed for the first time in India. Through this BSNL will usher in a new era of growth in rural areas. This technology offers broadband speed upto 7 Mbps at a distance of 15 Kms. It also offers mobility in wireless broadband. Some of the applications, which will become possible to be provided in rural areas, are –

High speed broadband connectivity to Common Service Centers in rural areas which will offer services like:

• Payment of utility bills
• Issue of birth certificates
• Land records
• Vehicle registration etc
• All applications associated with e-Governance projects of the State Govts
• Connectivity to Village Panchayats through high speed broadband
• Video conferencing enabling Tele-medicine and Tele-education
• Connectivity for Bank ATMs, Railway Reservation Centers etc
• High speed internet browsing.

BSNL is offering this service at a very low cost with starting tariff of Rs 140 per month in rural areas.

In the first phase BSNL plans to cover 1000 Block Headquarters across the country out of which 32 Block Headquarters in Rajasthan will be covered. This will provide high speed wireless broadband connectivity to 11,500 Common Service Centers in respective Blocks. Through this technology, BSNL has planned to cover the remaining Block Headquarters for connecting 50,000 Common Service Centers in the next phase. This project is being supported by the Department of Information Technology, Govt. of India.

The Rural Common Service Centers is part of the Bharat Nirman programme of the Hon’ble Prime Minister of India and will help in bridging the digital divide between urban and rural areas. This milestone will also help in increase the rural tele-density and also will bring rural areas to the broadband map of the world.

BSNL has also tied up with M/s. Intel to provide embedded chips which will help in market acceleration for providing customer premises equipment at affordable cost.

Q. What are BSNL’s growth plans for the next 2 years? Is this growth planned to be organic?

A. During the next 2 years (2010 – 2012), BSNL plans to provide large number of phone connections and Broadband connections on ADSL as well as Wireless technology. Existing Optical Fibre Cable network and TAX capacity will also be increased suitably. The growth planned is dominantly organic.