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Thursday, July 26, 2012

BSNL: Bouncing Back?

It was a make-or-break year for BSNL but the company fared very well. On revenue terms, the company has shown a drop in revenue from `29,688 crore in FY11 to `28,447 crore in FY12 but on the PAT (profit after tax) front, the company has improved significantly by netting `8,347 crore vis-a-vis `6,384 crore in FY11.

The company has done extremely well on mobile and NLD services. On the mobile front, the company has increased its revenue by 31% to net `6,482 crore. With respect to NLD services, the company has increased its revenue by `698 crore to net `5,646 crore. On mobile services, the company is doing extremely well and 3G services are now available in 963 cities and the services is available to all its mobile customers. Presently, non-voice contributes around 13% of the overall mobile revenue and the company plans to increase it by entering into non-exclusive agreements with VAS players.

On the capex front, the company has invested `5,000 crore in FY12 for ongoing GSM, broadband, and fiber-to-the-home projects but this year the company plans to invest `9,086 crore and more focus is on mobile and broadband services. Recently, BSNL has finalized 10.15 mn GSM line order to ZTE worth `3,200 crore for northern and southern zones. The order is planned to be executed within one year for both 2G and 3G services and will involve planning, financing, engineering, supply, installation and testing, commissioning and annual maintenance of GSM lines.

On the broadband front, the company is the undisputed leader with more than 9 mn subscribers thanks to the timely availability of equipment and introduction of VAS services like games on-demand, music on-demand, education on-demand, and others.

The company has also launched BWA services in rural areas of the country for connecting rural CSCs (common service centers) and village panchayats for the government program. Presently, WiMax service is operational in 169 cities of Kerala and 50 cities of Punjab. In future, the company doesn't want to operate BWA service in all the circles but plans to be selective.

The company has been identified for NOFN project due to its reach and fiber resources. It has 700,000 km of optical fiber routes countrywide and a major part of it is the rural areas. This network largely overlaps all other blocks of the country. BSNL's fiber connectivity is already available in 6,000 panchayats out of 2.5 lakh panchayats in the country.


On the enterprise part, BSNL has transformed a lot. The company is aggressively looking at the enterprise market in a big way by imparting training to the teams, focusing on solutions, and account expansion.

The company is providing end-to-end communication solutions to government departments, PSUs, banks, airlines, and corporates in big way. Some of the projects bagged by the company include: CCTNS project, department of justice project for connecting all the courts in India, and NME-ICT project for providing internet bandwidth to colleges.

In terms of numbers, BSNL's enterprise has done well as the company has bagged orders worth `2,985 crore and plans to achieve revenues of `3,561 crore in FY13. To give a big push to the enterprise division, the company has established 9 IDCs (internet data centers) to be used for co-location, hosting, managed services and cloud services along with Sai InfoSystems and Dimension Data.

In its quest to generate additional revenue, the company has signed master service agreements with 9 operators on a pan-India basis. Till date, the company has leased out 1,526 sites and plans to lease 3,000 BTS tower sites in FY13. Apart from this the company is also looking at utilization of land and building for call centers/BPOs, utilization of telecom factory infrastructure, broadband connectivity to schools, establishing Wi-Fi network, and leasing out CDMA/EV-DO network.

It's a good beginning for the company as the Indian government has identified BSNL as one of the three players to deploy NOFN (national optical fiber network) due to its reach and fiber resources. The company is awaiting commercial clearance for doing a pilot in Arain Block of Ajmer district of Rajasthan which will cover 30 panchayats. All this holds lot of promise for BSNL in future.

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