BSNL loses rural hold, hits rock bottom

Private telecom operators have now overtaken government-owned telecom operator Bharat Sanchar Nigam (BSNL), according to a report published in the Financial Express.

BSNL used to be the premier operator with reach across India but private operators have trumped them with better tariffs and marketing.

BSNL used to rule rural India since private companies were slow to go into the interiors of the nation. That used to be the strongest argument against the company's closure.

Things have now changed. BSNL has made losses for more than five years and private operators have taken over more than half of BSNL's wireless market share in rural areas in the last 10 years.

Telecom Regulatory Authority of India (TRAI) data showed that BSNL’s wireless market share in rural areas was 6.82% at the end of December 2018 as against 15.36% at the end of June 2009. Even Reliance Jio, which launched in September 2016, has a higher rural market share with 19.01%.

The report cites analysts who pointed to common PSU problems like slow decision-making, bloated staff with high wages who are poorly trained, and a lack of timely expansion and upgrade of the network.

Broadband India Forum President TV Ramachandran, said that BSNL's rural decline could be due to a lack of 4G spectrum, which denies people high-speed internet. “However, as the decline has been a consistent thing for 10 years, better customer experience by private operators could also be the reason,” he said.

Telecom analyst Mahesh Uppal said, “BSNL is up against private operators with the latest infrastructure and technology. Unfortunately, there are not enough revenues to protect or expect for the state-run firm in rural areas. This makes it difficult to justify sufficient investments that will allow it to compete with the new players."

Vodafone Idea leads the rural market today with a share of 41.76 % followed by Bharti Airtel with 31.91%. BSNL's 6.82% share is not even close.

India's overall rural wireless subscriber base rose to 528.48 million at the end of December 2018 in comparison with 521.59 million at the end of September 2018.