BSNL mobile network critically overstressed

Caught between politics, controversy and business, state-owned Bharat Sanchar Nigam Ltd BSNL is running its mobile services on a highly over-strained network.

Caught between politics, controversy and business, state-owned Bharat Sanchar Nigam Ltd BSNL is running its mobile services on a highly over-strained network. In 12 out of 26 circles, the company has issued more mobile telephone connections than the capacity available on its network.

In another four circles, there is no capacity left to give any new telephone connection. While figures are available only up to May 31, in the last one and a half months the situation is believed to have worsened as no new capacity has been added.The Department of Telecommunications DoT has divided the country into 28 telecom circles for administrative purposes. The boundaries of a telecom circle roughly coincide with the boundaries of a state.

However, big states like Uttar Pradesh have been divided into two circles, while smaller North-Eastern states have been combined into two circles. The four metros, too, are different circles. BSNL operates services in 26 circles. In Tamil Nadu, home state of telecom minister A Raja and his predecessor Dayanidhi Maran, the BSNL network is working at a capacity of 142 per cent. As on May 31, it had given 20,75,604 telephone connections, while the capacity is of only 14,53,950 connections.

Similarly, in Maharashtra, the company has given 2,30,000 more telephone connections than the capacity of network. In Kerala, the company had issued 1,76,000 more telephone connections than its capacity of 17,87,125 connections by May-end. The industry standard is around 60 per cent.

No wonder, BSNL is fast losing its marketshare.In May, the company added 2,38,553 new telephone connections while market leader Airtel added 18,51,000 new telephone connections. Both are national players. The only difference between the two is that Airtel has enough spare capacity while BSNL has none. Its share in new GSM subscriber addition has reduced to 4.5 per cent in May 2007, from a high of 31.5 per cent in December 2005. It added 10.1 lakh new subscribers in December 2005, a decline of over 76 per cent.

Airtel registered a growth of over 100 per cent in new subscriber addition during this period. It added over 19.6 lakh new subscribers in May, compared to 9.7 lakh in December 2005.

BSNL issued a notice inviting tenders for 45 million GSM lines in March 2006. More than 15 months have passed and the company has not even issued the purchase order, which is basically the letter of intent LoI issued to successful bidders. The tender was always marred in controversy. The first controversy erupted when Motorola8217;s bids were rejected on technical grounds during Maran8217;s tenure as minister. Motorola went to court and the process of procurement was delayed for eight months.

Story continues below this ad

After taking charge, A Raja questioned the BSNL tender price and termed it as very high.