‘IPO in this UPA regime? It may take time’

State-owned Bharat Sanchar Nigam Ltd (BSNL) has pinned its hopes on mobile-telephony expansion and number portability to regain the number one position in terms of user base. Also, it wants to use new technologies such as internet protocol television (IPTV) for tapping the fixed-line market. Kuldeep Goyal, chairman-cum-managing director of BSNL, spoke to Nivedita Mookerji of DNA Money on a host of issues, including the telecom major’s plans in a scenario of intense competition, particularly in newer technologies, the chances of a merger with MTNL, and the mega mobile telephony tender it is slated to open on September 10. Excerpts:

Given the fierce competition, what is BSNL’s primary goal and objective?
Our goal is to reach out to maximum people across the country and provide connectivity to them through telephone, broadband, etc.

But, isn’t intense competition in the market a hurdle?
That makes it even easier. All the people are contributing towards mass connectivity. BSNL’s efforts will get supplemented by other operators who are working on that.

How do you stay ahead in the race?
Of course, it’s a competitive world. The race is very tough, I agree, but BSNL has its strengths. We have our people everywhere in the country and we are planning to take our expansion into remotest places so that we can be ahead in the race. Our expansion is going as planned and we are trying to reach every area.

As a state-owned telecom company,  what are your biggest advantages and disadvantages?
As a state-owned telecom firm, you have people’s  faith.  And they believe that a government-owned company is trustworthy and does no wrong. People’s faith in a public sector company is the biggest advantage, I feel. The transparency and reliability people associate with a state-owned firm is a definite advantage.

And the disadvantage is that a state-owned company is burdened with a lot of rules and regulations, monitoring at various levels, audits, CVC and CBI checks, etc, so your actions get hampered and your procurement cannot be that fast. You cannot take decision as fast you can in the private sector.

BSNL’s proposed IPO has been a controversial subject. What’s the latest on it?
As you know, the BSNL board recommended that an IPO be considered by the government. But, employees feel that it is probably not in their interest. So, we are talking to them. Many of these associations have understood our point, but others are apprehensive that once it is listed, BSNL will soon be privatised. We are talking to them.

Are you optimistic that the BSNL IPO will happen in the current UPA regime?
Well, it may take time. When it happens, I would not like to guess.

Is there any other hurdle to the IPO apart from the BSNL union’s resistance?
Mainly, it’s the employees’ feelings. I don’t think there’s anything other than this.

There seems to be no consensus on BSNL’s listing at the top level of the government…
I am not aware of that. But, as a company, we feel that BSNL should be listed.

Have you already appointed a merchant banker?
That would be the job of the government.

Are there talks going on with merchant bankers for an IPO?
They (merchant bankers) are approaching us, but there’s nothing concrete as yet.

What are your plans on introducing the Blackberry service?
Talks are at an advanced stage, but  I can’t give you a date. We want to do
it soon.

Does that mean that from the government side, there’s no security-related problem in launching a Blackberry service, as was the situation till recently?
I understand so.

When are you planning to roll out 3G (third generation) services?
We are trying to roll out 3G in some places by the end of December. Then, we want to gradually launch the service in some parts of the country by mid-2009.

Do you have spectrum for the entire rollout of 3G service?
Yes, we have.

Do you see mobile number portability happening soon?
That’s what the government’s intention is and I think it should happen.

Will BSNL gain from mobile number portability?
BSNL’s endeavour would be to gain from number portability. We were a late-starter in mobile telephony, seven years after competition. Customers in the top bracket were already taken away by private players by the time we entered the mobile space. So, our endeavour would be to tap such customers after number portability comes. For that, network quality has to be good and we are working on that.

It is believed that BSNL is working on some path-breaking roaming agreements. What is that all about?
Well, we continue to work on roaming agreements, but I don’t know anything about the path-breaking ones.

As far as subscriber base is concerned, what is your target in the months and years to come?
We have about 73 million customers as of now. We are aiming to add 2.5 million customers every month over the coming years. So, we intend to add around 30 million customers every year.

Recently, Bharti became the number one telecom operator in the country, surpassing BSNL. Did that upset you?
They became number one only in terms of customers. But, in terms of revenue, BSNL is still number one. This is a competitive world and like everyone else, even BSNL would like to remain ahead in competition. However, we welcome and congratulate Bharti Airtel on becoming the number one.

So, what is your strategy to regain the number one spot in terms of subscriber numbers?
As I said, we are aiming to add 2.5 million every month to stay ahead in the race.

How do you look at the fixed-line telephony scenario with the subscriber numbers falling every month? Do you think the trend will continue or reverse?
I think the trend should reverse. Broadband and IPTV should give a boost to landline numbers in India. In China, landline numbers are ten times more than India. So, there’s no reason why we should not have a good number of landlines in the country. If private operators also come out with their landline plans, the fixed phone subscriber numbers are bound to go up significantly.

What are BSNL’s plans to increase the fixed-line phone subscribers?
BSNL already offers fixed telephony across the country. We are trying to augment our network in every newly developing city. The objective is to provide landline connection everywhere and if not, at least limited mobility or WLL connection all over.

You mentioned IPTV service. What’s happening there?
We are planning to establish IPTV service in at least 100 major cities in this financial year. We have already started IPTV in Pune, Kolkata and Jaipur. IPTV will now get a boost as the regulatory regime has now been cleared and TV channels are being offered by media houses. Apart from better quality than cable TV, IPTV also offers facilities such as time-shifted television. That means you can watch a programme at a convenient time and date after it has been aired. Video-on-demand is also available on IPTV.

Are you also getting into segments like direct-to-home (DTH) broadcasting and mobile TV?
Yes, we are getting into mobile TV. We don’t have any plans for DTH as yet.

You are set to open a mega GSM tender worth around $9 billion for over 90 million lines on September 10. Do you think it will be free of controversies this time around?
We think it would go smooth this time. We have taken care that there are no ambiguities in the tender.

How long will the tender process take? And by when do you think the GSM lines can be installed?
The finalisation could take around six months. After that, another three months would be needed for rollout to start.

What is BSNL’s strategy on the two technologies — GSM and CDMA?
We are using GSM mostly for mobile telephony connectivity in cities and CDMA to reach out to the far-off pockets and rural areas. Earlier, we were using CDMA for limited mobility or WLL.

How do you see the GSM-versus-CDMA scenario in the coming years?
GSM will continue to be a leading technology in terms of subscriber numbers. The trend of three-fourth or 75% GSM subscribers will continue, I feel.

In telecom tariffs, do you see a further downslide?
There may be some fall, but margins are very thin now. There may not be any drastic reduction in tariff.

If at all the tariff declines further, what could be the range?
May be 10%, not more.

Is the BSNL-MTNL merger completely on the backburner now?
There’s nothing to my knowledge at the moment. We have synergies for operations. But as far as merger is concerned, I don’t think presently it is under active consideration.
 
 m_nivedita@dnaindia.net