SURVIVING JIO: PSU telecom company has started offering 4G VoLTE services through its 3G spectrum
Notwithstanding the delay in the allotment of 4G spectrum, state-run telecom player BSNL has readied an investment plan of Rs 10,000 crore for the deployment of 4G network.
It has already started offering 4G VoLTE services through its 3G spectrum with new base transceiver stations (BTSs) in all circles where it already offers 3G services. In 2018-19, the company added over 54,000 new state-of-the-art mobile BTSs to its network as it looks to expand its coverage area.
“We will invest around Rs 10,000 crore, once the allotment of 4G spectrum is done by the government. The capex will be done to fill in the void left in providing 4G services,” a senior official from BSNL told DNA Money.
CLEAR SIGNAL
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- BSNL expects 4G spectrum allotment to happen by next month
- The company has plans to switch to 5G without making too much investment on 4G services
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The investment will be done in phases and will come from internal resources. Right now, the company does not have any liquidity issues, the official said.
The company has plans to switch to 5G without making too much investment on 4G services. BSNL had asked for allotment of 4G spectrum from the government in 2017, but is still awaiting a final nod. It is expected that the approval will happen by next month, the official said.
The data consumption on BSNL mobile services has grown 10 times in just over four years and doubled in just 23 months. In April 2015, the data consumption stood at 200 TB, which has increased to 1000 TB in July 2017 and 2000 TB in June 2019.
BSNL has also launched a service -- 4G Plus, allowing subscribers to access data on any of its WiFi hotspot across the country.
The revival package, which includes a voluntary retirement scheme (VRS) for BSNL employees and asset monetisation plan, is key to the telco's comeback move. From reporting a profit of Rs 10,000 crore during 2005, it recorded a loss of Rs 7,500 crore last year. For the first time in its history, the company delayed the salary of its employees for February, which was paid in mid-March, due to cash crunch.
A cabinet note on revival measures for BSNL and MTNL is expected to be floated soon as final discussions within the ministry are over, according to sources.
BSNL has been incurring losses since 2009-10. Due to hyper-competition and huge employee costs, total expenditure has hit the roof while revenues have nosedived. For BSNL, about 55% of its expenses go into paying employee salaries as it has a huge base of 1.76 lakh employees across India. A VRS proposal of Rs 6,365 crore for BSNL staff is under consideration.
The ailing PSU is already at a disadvantage compared to private peers like Vodafone Idea and Airtel, as they have been rapidly expanding their 4G network and coverage. The new player Reliance Jio, which shook the telecom industry with its disruptive pricing, has a pan-India 4G network. The data consumption on mobile devices has gone up substantially since the advent of 4G in late 2016 with Reliance Jio.
Though the data consumption on mobiles grew substantially, the financials of the incumbents took a hit after the entry of RJio, which also led to a consolidation in the telecom sector. Now, only three private players are left and a telecom PSU BSNL/MTNL in the industry.
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