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INTRODUCTION
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INTRODUCTION
TELECOMMUNICATION:
REGULATORY FRAMEWORK:
Mobile service: four licenses have been awarded in each of 22 telecom circle.
Three licenses have been awarded to private service provider and one to the
government operator. The private licenses have been issued based on a bidding
process.
Fixed lines services: there is no restriction on the number of player in the fixed
line segment. The licenses have been awarded based on a fixed entry fees, issued
on a non exclusive basis for a period of 10 years, extendable by 10 years at a time.
Internet service: there is no restriction on the number of player in the ISP segment.
Ministry of communication and information technology are as follows:
Telecom commission
DOT
TRAI
TDSAT
WPC
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FACTOR RESPONSIBLE FOR THE GROWTH OF
TELECOMMUNICATION INDUSTRY
After the inception in India, over a period of 200 years, telecommunication has
indeed grown by leaps and bounds to occupy an important position in the
Indian economy today. Buoyed by the rapid surge in the subscriber base, huge
investments are being made into this industry. There were around 200 million
telephone lines in India which makes it the 3rd largest phone network in the
world after china, and the US. Today, the telecom market in India enjoys the
highest growth rate in the whole world. The improvement in the standard of
living and the development of infrastructure and connectivity are some of the
main reasons for the significant growth of the telecom industry. In order to
capitalise the opportunity of meeting the subscriber needs in highly competitive
market the operators have reduced the tariffs to attract subscribers with low
purchasing power primarily in semi urban and rural India. Through the
changing regulations and events, the Industry players are aiming to achieve
acquiring new subscriber by expanding in semi urban and rural India, and
selling more services to existing subscribers. Several steps were taken to
improve the tele-density in the country. Targets of additional DSLs were
enhanced. Intensive efforts are being made to cover more villages through
VPTs. Private sector is being encouraged to provide telecom facilities at a
faster pace. The progress made was reviewed by the Minister of
Communication during the meeting held with circle heads and heads of SSA
Companies like Ericsson and Nokia are in talks with telecom operators to help
them check the feasibility of setting up 5G in India. With the Indian
government also making a push for smart cities, IoT also comes into the play.
The investment in this sector will have to be for the hardware, infrastructure
and software platforms as well as applications and network connectivity. Cloud
storage and data analytics are another part of the ecosystem. There are also
many other factors that need to be considered like regulations, security, data
privacy and standards for connectivity.
While the challenges are many, India looks set to grow and move into a
formidable position in the telecom industry and its growth. This is due to the
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vast nature of our country, the penetration level that can be made possible, and
the massive demand for alternative services through the telecom ecosystem.
The Challenges:
The kind of growth that is set to happen in the Indian Telecom industry poses a
challenge. The infrastructure needs to scale up for 5G. Also, there is a highly
competitive trend in the market to retain or woo customers. It will require an
excellent balancing act by the Telecom service providers to ensure reach,
quality services as well as affordability. This could mean that these companies
would have to invest in these facilities while being forced to adopt innovative
approaches for providing services.
Also, there is the question of providing value to customers. This would depend
a lot on how these companies tie up with other service providers to offer
services like m-Health or m-Payments. The idea of using your mobile device as
a safe and secure device using which payments can be made is essential.
This is what has driven services like Vodafone m-Pesa; Airtel Money and
these can also drive alternate revenue generation options for them. In other
words, companies are exploring non-core functions to garner revenue. There is
much disruption happening in the market, and this has also led to a
consolidation of sorts.
India has a huge role in the Telecom Industry growth. After all, it has more
than a billion mobile subscribers and also the second largest Internet user base.
In India, social networking, digital payments, and online shopping have caught
on like wildfire. With the Government’s push for Digital India, many service
providers are rolling out services in health, financial services, education, and
entertainment. For example, people are subscribing to music streaming or
learning facilities. M-Payments are driven by the government’s push for
cashless India using internet which is provided by telecom operators.
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INDIAN CELLULAR MARKET
The rise of Jio has been the standout story in India's mobile market in recent
years. . Jio continues to increase its 4G Availability, with the highest national
score we have ever recorded — an outstanding achievement when you consider
the challenges India's operators face and the speed at which the market is
maturing. But Jio's rivals haven't been complacent. We've seen some
impressive growth across all of our metrics, with Airtel's download speed
increases worthy of particular mention. And we expect to see this growth
continue as the Indian mobile market matures.
The merger of Vodafone and Idea Cellular is set to create India's biggest
operator, with some 387 million subscribers across the country and plans
to extend its 4G network to over 80% of Indian users. Vodafone and Idea are
currently still operating as separate consumer brands, so in this report we will
treat them as individual operators. But the combination of the two giants means
the Indian mobile market will soon be paired down to four major national
mobile operators. There are now hopes this will ease the fierce round of
mergers and acquisitions in the market, helping to ease the ferocious price war
in the country.
India's remaining operators are now seeking other ways to differentiate their
services rather than continually undercutting each other. The focus is already
shifting further towards service quality, with both Airtel and Vodafone
Idea talking up their 4G network improvement plans, while Jio has gone one
step further with a pledge to bring 5G to India before its rivals. And as mobile
Video Experience gradually improves, many operators are now forging content
deals to attract subscribers and drive data use. High levels of competition have
put a lot of price pressure on India's operators. But this should now abate —
and relatively low levels of smartphone penetration and a vast customer base
mean there is still a fair bit of room for organic growth.
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Wireless subscribers in India:
As of December 2018, there were over 1.1 billion mobile wireless subscribers
in India. Some of the biggest mobile telecom companies in India include
Bharti, Vodafone, and Idea, who have over 600 million Indian subscribers
combined. Bharti is the overall market leader in the wireless subscriber market
with a 23.65 percent share. In comparison, Vodafone has an 17.86 percent
share and Idea has a 16.54 percent share. BSNL, the market leader in the Indian
wireline segment, has just a 8.78 percent share in the wireless subscriber
market.
Vodafone was the second largest mobile telecom provider in India with over
212 million subscribers as of June 2017. It is also the world’s second largest
mobile telecommunications company measured by both subscribers and 2013
revenues, and had over 434 million global subscribers in March 2014. India is
by far Vodafone’s biggest market in terms of subscribers with over 100 million
more subscribers in the country than in its second largest market, South Africa,
which has 65 million subscribers. As a result, almost 18 percent of Vodafone
employees were located in India in 2013, in comparison to the 16 percent who
work in the United Kingdom, where the company is headquartered. In 2014,
the company announced worldwide revenue of over 38 billion pounds.
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COMPANY PROFILE: BSNL
Bharat Sanchar Nigam Limited, BSNL is an Indian state-owned
telecommunications company, headquartered in New Delhi, Delhi, India. It
was incorporated by Government of India on 1 October 2000. It provides
mobile voice and internet services through its nationwide telecommunications
network across India. It is the largest wire line telecommunications network
company in India with more than 60% market share and fourth largest wireless
telecommunications Operator. The BSNL is India's oldest and largest
communication service provider (CSP). It had a customer base of 95 million as
of June 2011. It has footprints throughout India except for the metropolitan
cities of Mumbai and New Delhi, which are managed by Mahanagar Telephone
Nigam (MTNL).
History:
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Services
The BSNL provides almost every telecom service in India. Following are the
main telecom services provided by The BSNL:
3G: The BSNL offers the '3G' or the'3rd Generation' services which includes
facilities like video calling, mobile broadband, live TV, 3G Video portal,
streaming services like online full length movies and video on demand etc.
IPTV: The BSNL also offers the 'Internet Protocol Television' facility which
enables watch television through internet.
FTTH: Fibre To The Home facility that offers a higher bandwidth for data
transfer. This idea was proposed on post-December 2009.
VVoIP: The BSNL, along with Say Info system - an Information and
Communication Technologies (ICTs) provider - has launched Voice and Video
Over Internet Protocol (VVoIP). This will allow to make audio as well as video
calls to any landline, mobile, or IP phone anywhere in the world, provided that
the requisite video phone equipment is available at both ends.
WiMax: The BSNL has introduced India's first 4th Generation High-Speed
Wireless Broadband Access Technology with the minimum speed of 256kbit/s.
The focus of this service is mainly rural customer where the wired broadband
facility is not available.
Quality of Service
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The BSNL goes by the motto "Connecting India, faster" and displays the same
at their homepage. The service quality of BSNL Customer service has been
severely criticized as very poor. The mobile services provided by BSNL in
almost every part of the country were and still are criticized for network
outages and frequent call drops. Despite the criticism there is very negligible or
no amount of work being carried outby the authorities to improve the
performance and quality of the network. BSNL claims to offer seamless
coverage in almost all forests of India in collaboration with state forest
department.
Market Size:
India ranks as the world’s second largest market in terms of total internet users.
The number of internet subscribers in the country increased at a CAGR of
45.74 per cent during FY06-FY19 to reach 636.73 million in 2018-19. Total
wireless data usage in India grew 119.00 per cent year-on-year to 17,940,576
terabytes between April-June 2019. The internet subscribers reached 665.31
million till June 2019.Further, India is also the world’s second largest
telecommunications market, total telephone subscriber base and tele-density
reached 1,195.24 million and 90.52 per cent, respectively, at the end of
September 2019.Gross revenue of the telecom sector stood at Rs 61,535 crore
(US$ 8.93 billion) during April-June 2019.Over the next five years, rise in
mobile-phone penetration and decline in data costs will add 500 million new
internet users in India, creating opportunities for new businesses.
Investment/Major development:
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With daily increasing subscriber base, there have been a lot of investments and
developments in the sector. FDI inflows into the telecom sector during April 2000 – June
2019 totalled to US$ 37.05 billion, according to the data released by Department for
Promotion of Industry and Internal Trade (DPIIT).
Some of the developments in the recent past are:
As per report by Ericsson, India has the world’s highest data usage per
smartphone at an average of 9.8GB per month.
As of August 2019, Jio's IoT platform is ready to be commercially available from
January 2020.
In August 2019, commercially launched Jio GigaFiber as wired broadband service.
During the first quarter of 2018, India became the world’s fastest-growing market
for mobile applications. The country remained as the world’s fastest growing
market for Google Play downloads in the second and third quarter of
2018.
Bharti Airtel is planning to launch 6,000 new sites and 2,000 km of optical
fiber in Gujarat in 2018-19.
Vodafone India and Idea Cellular have merged into ‘Vodafone Idea’ to
become India’s largest telecom company, as of September
Government Initiatives:
The government has fast-tracked reforms in the telecom sector and continues to be
proactive in providing room for growth for telecom companies. Some of the other major
initiatives taken by the government are as follows:
The Government of India is soon going to come out with a new National Telecom
Policy 2018 in lieu of rapid technological advancement in the sector over the past
few years. The policy has envisaged attracting investments worth US$ 100 billion
in the sector by 2022.
The Department of Information Technology intends to set up over 1 million
internet-enabled common service centres across India as per the National e-
Governance Plan.
FDI cap in the telecom sector has been increased to 100 per cent from 74 per cent;
out of 100 per cent, 49 per cent will be done through automatic route and the rest
will be done through the FIPB approval route.
FDI of up to 100 per cent is permitted for infrastructure providers offering dark
fibre, electronic mail and voice mail.
The Government of India has introduced Digital India programme under which all
the sectors such as healthcare, retail, etc. will be connected through internet
Achievements:
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Following are the achievements of the government in the past four years:
Road Ahead:
Revenues from the telecom equipment sector are expected to grow to US$ 26.38 billion
by 2020. The number of internet subscribers in the country is expected to double by 2021
to 829 million and overall IP traffic is expected to grow 4-fold at a CAGR of 30 per cent
by 2021. The Indian Government is planning to develop 100 smart city projects, where
IoT would play a vital role in development of those cities. The National Digital
Communications Policy 2018 has envisaged attracting investments worth US$ 100 billion
in the telecommunications sector by 2022. The Indian Mobile Value-Added Services
(MVAS) industry is expected to grow at a CAGR of 18.3 per cent during the forecast
period 2015–2020 and reach US$ 23.8 billion by 2020. App downloads in India are
expected to increase to 18.11 billion in 2018F and 37.21 billion in 2022F.
After facing cash crunch for some months, state-run Bharat Sanchar Nigam
Limited (BSNL) is expecting normalcy in cash flows in the second quarter
(July-September) of FY20, according to the BSNL Director (Finance) who
blamed the "predatory pricing" for the current crisis in the sector and in the
BSNL.
"The liquidity position of the company may start improving and normalcy
could be restored in the next quarter," S K Gupta, BSNL Director (Finance),
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has stated in a 16 May letter to the chief general managers and financial
advisors of all its telecom circle heads and district maintenance regions.
"This position may be conveyed to all the stakeholders of BSNL," the letter
read.
BSNL faced tough time in the fourth quarter (Q4) of FY19 when it failed to
clear its wage bill in February and salaries could be paid only on 15 March.
Facing one of the worst financial crisis, BSNL for the first time in 19 years failed to pay
salaries in February, leading to questions about impact of competition on the public sector
undertaking and its ability to withstand it. Blaming the "fiercest competition" for BSNL's
current weak financial position, Gupta said, adding: "The predatory tariff offerings by the
competitors led to sharp decline in the revenue from services." According to him, the
telecom sector has been facing fiercest competition and no other sector has faced such an
unprecedented competition in recent times. Despite experiencing the pressure of
competition on its revenues, he said BSNL had been able to sustain its customer base.
"The telecom sector being capital-intensive, wherein even to remain in business 'or'
to ensure business sustainability, the service providers are required to invest in new
technologies at frequent intervals as technologies evolve at a fast rate. The cumulative
effect of all these have resulted in liquidity crunch," he said. Saddled with 1.76 lakh
employees, mostly from the government, 55% of the BSNL's revenues is consumed by
salaries. Its monthly salary bill is around ₹1,200 crore.
With a bloody price war unleashed by Reliance Jio, the incumbents -- Airtel
and Vodafone Idea -- are reeling under declining profits or losses. And so is the BSNL, a
government-owned corporation.
BSNL said it has served the nation especially during difficult times of natural
calamities, and provides affordable services throughout India even at
remotecorners
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India’s Department of Telecommunications is considering that the matter
requires urgent focus, and meetings are on to find a solution to ensure there is
no impact on day-to-day operations of exchanges and other business, once the
VRS plan concludes. 57,000 BSNL employees opted for VRS on Friday
evening, four days after the VRS plan was rolled out. Nearly one lakh BSNL
employees are eligible for the VRS out of its total staff strength of about 1.50
lakh. BSNL’s internal target for VRS is pegged at 77,000 employees, which
essentially means that if the VRS reaches full target, the staff strength will
come down by half. The effective date of voluntary retirement under the
present scheme is January 31, 2020. BSNL chairman and MD P K Purwar said
that the telecom operator is planning business re-engineering and business
continuity. “We have to work meticulously because we have started taking the
data, which SSA, which unit, how many people are taking VRS. We will still
be left with about 80,000 people. So, the numbers are not less…but it will be
almost half. The work culture will also have to change,” Purwar said. BSNL
may be considering the hiring of the personnel opting for VRS of as
consultants in order to ensure business continuity. The other options include
tendering or outsourcing some of the work or roping in retired officers of the
telecom department who are already familiar with the tasks. Dot source said
that outsourcing certain operations will require time, including transition period
of 2-3 months after finalization of tender, and given that the VRS will come
into effect from January, a solution will have to be arrived at soon. BSNL
Voluntary Retirement Scheme – 2019 that was rolled out last week will remain
open till December 3. BSNL is looking at savings of about Rs 7,000 crore in
wage bill, if 70,000-80,000 personnel opt for the scheme
The amount of ex-gratia for any eligible employee will be equal to 35 days
salary for each completed year of service and 25 days salary for every year of
service left until superannuation.
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Identified Challenges in Revival /Restructuring of
BSNL
The challenges facing BSNL can be classified into three major heads:
Policy Environment
c. Flux in the Decision Regarding MTNL: MTNL serves the national capital
region and Mumbai. BSNL serves the rest of the country. All telecom service
providers have panIndia presence and earn about 40-50% of the revenues and
30-40% profit from these two metropolitan cities. However, despite this,
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MTNL has been suffering mounting losses. The operation of BSNL and MTNL
as two separate entities is economically, operationally and financially sub-
optimal.
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Chapter :2
Literature review
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A literature review or narrative review: is a type of review article. A
literature review is a scholarly paper that presents the current knowledge
including substantive findings as well as theoretical and methodological
contributions to a particular topic. Literature reviews are secondary sources and
do not report new or original experimental work. Most often associated with
academic-oriented literature, such reviews are found in academic journals and
are not to be confused with book reviews, which may also appear in the same
publication. Literature reviews are a basis for research in nearly every
academic field. A narrow-scope literature review may be included as part of
a peer-reviewed journal article presenting new research, serving to situate the
current study within the body of the relevant literature and to provide context
for the reader. In such a case, the review usually precedes the methodology and
results sections of the work.
Customer Satisfaction:
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service quality. In the various factors T. V. Ramachandran (2005) studied that
the Indian consumer is extremely price sensitive. Rajpurohit R.C.S. et al.
(2011) have conducted study and reveals that consumers prefer a particular
cellular service provider on the basis of network coverage, call tariffs and value
added services.
Service Quality:
The service quality has become a key concern in telecom marketing and has
received much attention from the post liberalisation in India. The service
quality is also remaining important part in augmented competition within
telecom service industry.
Kumar Ratnesh & Dr. Amit Kansal (2013) have observed that there
is high rivalry among the players in the Indian telecom industry and every
player is providing special offers and schemes to maximize their subscriber
base.
Rakshit Negi (2009) have studied the Mobile Communication and found
overall service quality of mobile communication was below average.
The highest quality gap was observed in the case of networking. Therefore,
better transmission quality, network coverage will improve the customer
perceived quality.
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SWOT ANALYSIS OF BSNL:
3. PAN India-reach: You name the place & BSNL is there. It has about 43.74
million line basic telephone capacity, 8.83 million WLL capacity, 72.60
million GSM capacity, 37,885 fixed exchanges, 68,162 GSM BTSs, 12,071
CDMA Towers, and 197 Satellite Stations.
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network connecting 623 districts, 7330 cities/towns & 5.8 lakhs villages, they
are not able to optimize the network capabilities.
4. Poor Service Image: With the advent of technologies & new players
foraying in the telecom sector serviceability & CRM is important aspect for
the growth of the business but BSNL has maintained its poor service image
since its incorporation.
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2. Competition: Price war in the home market, technologically advanced
private players and declining margins is adversely affecting the overall
business of the company.
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