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BSNL's Chief Issues Parting Shot

Outgoing chairman and managing director of Bharat Sanchar Nigam regrets not being able to show profit like other private players

July 28, 2010

3 Min Read
BSNL's Chief Issues Parting Shot

After more than three years at the helm of India’s massive state-owned telecom operator Bharat Sanchar Nigam Ltd. (BSNL) , chairman and managing director (CMD) Kuldeep Goyal believes his biggest achievement was to restructure the company and give it a greater focus on sales and marketing.

But Goyal, who is set to retire from his current job on July 31, also has regrets, mainly that he couldn’t help BSNL grow as fast as its privately held rivals in the past few years, during which time India’s telecom market has added hundreds of millions of mobile subscribers, including 178 million in 2009 alone. (See India Ends 2009 on a Mobile High.)

"The restructuring that we carried out at BSNL went a long way in giving direction to the company," Goyal tells Light Reading Asia. "We created four new verticals -- fixed lines, mobiles, new businesses, and enterprises. Earlier we were not focusing on the enterprise segment at all, but today it is one of the focus areas," adds Goyal, who was a keynote speaker at Light Reading's recent Mobile Broadband Summit event in New Delhi. (See WiMax, 3G to Dominate India's Broadband Future.)

BSNL has redeployed about 10,000 staff to focus on sales and marketing during Goyal's tenure with plans to hire at least the same number again in the coming year or so, and for the first time the operator has staff dedicated to sales and marketing in each department.

However, in spite of the restructuring and increased focus on sales, the company has been losing market share. According to the latest data by the Telecom Regulatory Authority of India (TRAI), BSNL had a market share of 11.44 percent of the mobile market in June, compared with a 12.91 percent share just over a year ago in May 2009. (See India Adds 18M Subs in June and BSNL Struggles for Subs in May.)

BSNL certainly tried to keep up with its rivals, but its troubled GSM network expansion tender left it struggling to compete with the likes of Bharti Airtel. (See Is BSNL in Revamp Mode? and BSNL Scraps Monster Mobile Tender.)

The operator has even gained a head start over its rivals by securing its 3G spectrum in advance, and launched its services in early 2009. However, it was unable to capitalize on that advantage. (See India's 3G Players Ready for Swift Launch, India 3G: BSNL Hits 1M, and MTNL, BSNL Prep for 3G Battle .)

As a result, while other Indian operators have grown their customer bases and revenues, BSNL's finances have stagnated, with the operator expected to announce a net loss for the financial year that ended in March 2010. "I would have liked to show growth of 20 to 30 percent like other operators, but things didn’t work out that way," he notes.

The company has also been linked to a potential IPO, but Goyal believes that such a move "is not likely to solve the problems right now. Maybe after some time, and once we start showing profit." (See IPO Not the Cure for BSNL's Ills.)

The government has invited applications from both private and public candidates in its search for Goyal's successor. Until a permanent replacement is found, however, BSNL's director of Human Resources, Gopal Das, will take over from Goyal as interim CMD. (See BSNL to Split Top Role and BSNL Faces Exec Crisis.)

— Gagandeep Kaur, India Editor, Light Reading

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