Atanu Dey On India's Development

Advice to BSNL and MTNL

May 23, 2008 by Atanu Dey

My friend, Arun Mehta, has some advice for the public sector telecom providers. They are losing customers. Arun believes that their approach is wrong and that they should see the opportunity in using their last mile access for affordable internet connectivity. I reproduce (with his permission) his recent contribution to the india-gii mailing list.

In the May editorial of Voice and Data, Ibrahim points out that BSNL lost 4.4 million landline customers in 2007-8 alone, while MTNL lost over 200,000 just in Mumbai and Delhi in the same time. Given their vast investments in buried copper, and an army of linesmen, who are not needed for mobile connectivity, they are in a jam. Going by the BSNL advertising campaign — unprecedented and huge, by the way — they seem to have two strategies to counter this:

  1. Somehow sell the idea that a landline makes you respectable.

    The Bollywood star Preity Zinta figures in this ad, in which she refuses to marry someone who doesn’t have a landline. Hopeless cause, IMO. In my perception, people sometimes seem a bit disappointed when you give them the landline number instead of the mobile, as if you didn’t trust them enough.

  2. Convince people to get broadband over DSL, which, as the editorial points out isn’t working.

    For this to work, they need to encourage the Internet, instead of placing obstacles in its path. They should realise that the future is the Internet, not stupid voice-centered telephony, and where there is a conflict, go with the former. Towards this end, they should take a fresh look at the recommendations below, some of which we have only been making for the last 15 years or so (feel free to add to the list):

    • get rid of all restrictions on Internet telephony, the killer app for the illiterate and poor.
    • stop censoring the Internet, and restricting the use of technologies such as encryption
    • take action against those sending spam from India
    • allow the nation to have a truly independent regulator, with genuine teeth

  • http://idlinginc.blogspot.com idlinginc

    Regulator (and regulation) may not be a good idea.

    The part below about net neutrality, but it applies for all regulation:

    http://cyberlaw.stanford.edu/node/5092

    The federal government is a poor choice for any of this – From defining what is required of a provider to satisfy “neutrality,” to developing the rules for enforcement, to operating those rules, the federal government and in particular the FCC are poor choices to solve the problem, assuming the problem exists in the first place. Maybe the Internet has worked so well because neutrality has been a persistent part of the architecture. Maybe it’s worked so well because there has been minimal government regulation of its design and operation. Maybe both. More of the latter to shore up the former is a dangerous trade-off.

  • rishi

    The DSL service of BSNL does have a cost advantage over private operators. It’s service starts from Rs 250 while most private telcos start their service from Rs 500.

    But, you can see that for broadband there is generally a difficulty in getting a connection and it reminds us of the time in which the difficulty was for the phone.

    BSNL, also gets a percentage of the revenue of all mobile operators as the Access Deficit Charge (ADC) and the Universal Service Obligation (USO). So if BSNL is failing, then it just takes a little lobbying to increase these fees.

  • http://www.sundarmail.com Sundar

    BSNL is an orphan and riddled with sarikari work culture.

    The way their GSM tender was prolonged looked like a conspiracy by brivate GSM players.

    Few years back, I had to surrender BSNL and get Airtel with Broadband as they had six months waiting period. Now it is more or less available on demand.

    Wireline is not dead and is more reliable during emrgencies where wireless network gets chocked.

    Finally, I do not understand why they should charge more than Rs 500 for unlimited broadband home connection.
    When we get unlimited 2 Mbps Broadband for Rs 500 to Rs 1000 in US / UK, why should they have ten stupid plans and higher download costing Rs 1+ per MB.

  • lurker

    There is a vast chunk of RF spectrum in india that can be used for this.
    India did not have any UHF channels.
    All of thats tied with defense…
    I’d suggest auctioning it for 10/20 year terms with the infrastructure such that DOD can turn it off in an emergency.
    It will have the same issue as urban vs rural but auction prices will reflect

  • lurker

    There are even stories that BSNL and MTNL and other such public sector Babus have been pocketed(its easy in govt. – if MLAs can be bought, why not Babus) by some private firms, so that they willingly ensure that these public sector firms keep sleeping. And at the end of their tenures, these Babus will find a job with these private companies.