Strange are the ways of public enterprises. The government-owned Bharat Sanchar Nigam (BSNL) is appointing a consultant to improve its business processes so that it can give “private operators a run for their money”. The company is fast losing market share in cellular mobile telephony to private competitors as it doesn’t have enough capacity to meet the demand. It has not been able to place orders for procuring and installing GSM equipment even 15 months after opening of tenders. BSNL is the incumbent telecom operator providing services all over the country, except Delhi and Mumbai where Mahanagar Telephone Nigam Ltd (MTNL) is offering services. Its market share in new GSM subscriber addition has reduced to 7.8 per cent in April, 2007, from a high of 31.5 per cent in December, 2005, due to shortage of equipment. It added only 3.26 lakh new subscribers in April, 2007, compared to 10.1 lakh in December 2005, a decline of over 67 per cent.This clearly shows that the main problem in BSNL is of slow decision making. It is not clear what can a consultant do in such a case. “We are a big organization with a legacy of being a government department. We want to streamline our businesses so that we can compete with private operators,” said a BSNL official. It is not clear how the company will compete with its competitors as long as it doesn’t have any new connections to offer to the customers. The last major network expansion in BSNL was in October-December, 2005. During this period, BSNL added an average of 6.7 lakh new subscribers compared to 5.2 lakh of Airtel. Even regional players like Idea have added more subscribers ( 5.5 lakh) than BSNL in April, 2007. Idea is present in only 11 circles, compared to 21 circles of BSNL. At present, the company has been pushed back to the number three slot from number two position. Airtel is the market leader followed by Vodafone Essar. The decision making is so slow in BSNL that more than 15 months have passed and the company has not even issued advanced purchase order, which is basically the letter of intent issued to successful bidders. Once successful vendors accept this and deposit bank guarantees, they are issued purchase orders. Once an advanced purchase order is issued, it generally takes more than a month for BSNL to issue purchase orders. It takes another six to 10 months when the new capacity is added to the network. Therefore, even if BSNL issues advanced purchase orders to vendors this month, the new capacity will not be added before the next calendar year. During this period, BSNL will keep on losing its market share to its competitors.
