Does BSNL fails once again?
By MYBRANDBOOK
The centre recently pumped in around Rs 70,000 crore to revive BSNL’s lease. It’s not even six months since this relief package was announced, and there is already an attempt to scuttle the dying telecom company’s revival plans.
On March 23, BSNL floated a new tender to procure 4G equipment in a bid to expand its mobile broadband network. The contract would position the telecom company to offer high-speed Internet access to its users. This project is crucial for the company, as it is already four years behind private telecom companies including Reliance Jio and Airtel in launching 4G services.
So far, BSNL has been offering 2G and 3G services, thereby losing out on the opportunity to earn higher revenues from 4G customers. To plug this gap, the Centre decided to allocate 4G spectrum to BSNL this year and the company was quick to float the tender to award a comprehensive contract for planning, engineering, supply, and maintenance of its 4G network.
On April 15, the Telecom Equipment and Services Export Promotion Council (TEPC) sent a letter to various government departments, including the Ministry of Communications and the Prime Minister’s Office, alleging that the tender conditions set by BSNL flouted procurement rules under the ‘Make in India’ policy, and was heavily in favour of multinational companies. TEPC is an industry association representing domestic telecom equipment manufacturers such as Tejas Networks, Sterlite, HFCL, and Vihaan Networks.
BSNL has now been told to rework the tender after the Ministry of Commerce intervened. This means further delays. Meanwhile, Airtel has awarded a $1-billion contract to Finland’s Nokia for supplying 4G network equipment. No one has raised any security concerns on this deal.
It seems that lessons from the past, which ruined BSNL, have not been learned.
The latest tender for 4G equipment is more crucial than the 2G rollout in 2008. BSNL was still profitable then; now, it is fighting for survival. Rolling out 4G services quickly could still give the PSU a chance at cornering the market share in rural areas, where private players are just about launching services. If it has to compete with the likes of Reliance Jio and Airtel, then there has to be a level playing field.
It will be unfair to ask only BSNL to buy local 4G equipment, which is a largely untested, and let private player run on equipment supplied by global giants like Nokia and Ericsson.
More than 90 per cent of mobile users in the country are on private operators’ networks, and almost 100 per cent of these networks are supplied by foreign companies, including Chinese vendors.
That is not to say that Indian manufacturers should not be encouraged. Companies such as Tejas, Sterlite, and Aksh Optifibre have developed top expertise in specific areas of telecommunication networks. The Centre should do more to support Indian manufacturing companies in a manner that’s fair to all stakeholders in the industry.
But the burden of propping up domestic manufacturers cannot be put on BSNL alone, in a highly competitive telecom market.
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