R.K. Upadhyay had his hands full when he took charge of Bharat Sanchar Nigam Limited (BSNL) as chairman and managing director (CMD) in April 2011. The operator’s performance was impacted by mounting losses, operational inefficiencies, legacy issues and delayed processes. Employee morale as well as industry expectations from the country’s largest telecom PSU was low.

However, during the past three years, BSNL has witnessed some signs of revival, both on the operational and financial fronts. Tendering of new expansion projects, large-scale optimisation of networks, modernisation of equipment and a foray into new segments such as data centres and cloud computing services have helped the company arrest its losses to a large extent.

In an interview with tele.net, Upadhyay talks about his experience, the challenges faced in the past three years, and the way forward for the company…

What have been some of the key achievements of the company under your leadership?

In the past three years, BSNL has been able to reduce its losses, increase its wireless revenues and check the decline in wireline revenue. This is a result of several steps including close monitoring of the landline and wireless businesses. We have finalised long-pending tenders for wireless network expansion and migration to next-generation networks (NGNs). Both the projects are at an advanced stage of implementation. The modernisation of landline switches by IMS-based NGN will help BSNL in improving revenues from the landline segment.

We have signed an MoU with the Centre for Development of Telematics for modernisation of exchanges in rural areas.  Further, the GSM Phase VII network expansion project is in progress. We have been able to upgrade and expand our core transmission networks. All 330 secondary switching areas have been migrated to call detail record systems. The enterprise resource planning project is also progressing at a fast pace with implementation having been completed in seven circles.

What were some of the key challenges before the company when you took charge as CMD and how have you addressed them?

There were many but two merit a special mention. First, several of the company’s procurement tenders were held up at that time. Second, the overall employee morale was down.

To address these challenges, we introduced e-tendering across functions in BSNL, which made the procurement process easy and expeditious. Thereafter, several of our tenders witnessed successful completion. The first amongst these was that for the GSM Phase VII expansion programme. The successful tendering of the project gave out a positive signal to the industry at large as well as to BSNL’s employees about things moving forward in the company. Further, personal leadership and motivation have played a key role in lifting staff morale.

What are your views on the changing business dynamics in the Indian telecom sector? Where does BSNL stand in this scenario and how will it gain from it?

So far, telecom in India has been a voice-dominated business. The wireless revolution or GSM revolution, which the country experienced on account of sector liberalisation, was largely responsible for a steep increase in teledensity, both in urban and rural areas (the impact was bigger in urban areas). During this phase, the entire business and growth was centred on voice services. Even today, the market largely continues to be voice centric, with several operators earning around 80 per cent of their total revenues from the segment.

However, data adoption has been growing exponentially over the past few years. This trend can be attributed to factors such as the introduction of better applications and increasing availability of affordable smartphones. Industry estimates indicate that data usage would

continue to increase in the future and, therefore, operator networks need to be optimised around data services in addition to traditional voice services.

Data will play a very important role in the industry’s future growth. BSNL has taken several steps to benefit from this data wave. In August 2013, we rationalised 3G data tariffs and brought them at par with 2G tariffs. The move has been very successful and data usage has grown manyfold in the past eight months.

Further, as BSNL has the largest 3G network in the country, and its networks are being increasingly optimised for data usage, the company is well positioned to participate in the data revolution. In our Phase VII expansion, over 50 per cent of the procured equipment is 3G enabled.

How has been the uptake of the company’s broadband services? What steps are being taken to encourage adoption?

We continue to be a leader in the broadband segment in India, with around 65 per cent of market share. We are monitoring our broadband business and taking steps to improve the availability and uptake of these services across the country. We have been offering ADSL 2+ services to our broadband customers, which has helped us in arresting the decline in fixed line revenues. The demand for broadband is driving the landline business as well.

BSNL is currently focusing on 3G services and is offering broadband services through all technology platforms including fibre-to-the-home (FTTH). In fact, we are very optimistic about the uptake of FTTH services. The business is now picking up as it is capable of delivering high speed bandwidth-intensive services.  We have fairly large GPON infrastructure in the country, and are taking several steps to rationalise FTTH tariffs. The high cost of these services has been a key deterrent to adoption. Considering this, we have started providing FTTH services at the same rate as that of copper-wire-based services, for certain speed ranges. However, a different tariff structure is applicable if a consumer demands high speeds.

Fibre deployment is expensive even from an operator’s perspective; however, the segment has huge growth and revenue potential. While people will access data services when on the move, the highest volumes of data usage, particularly for infotainment applications, will be registered at fixed locations. We will increase our focus on FTTH in the future and deploy these networks in new and upcoming colonies and housing apartments.

What are your views on the 4G ecosystem in the country and what are BSNL’s plans in this regard?

The 4G ecosystem in India continues to be underdeveloped. Lack of 4G-enabled customer devices will pose the biggest challenge. Even globally, the number and pace of 4G deployments are not very encouraging. Further, finding stand-alone 4G customers is difficult as they also need voice services. Therefore, it is important to discuss as to how the spectrum, which is currently allocated for providing broadband services, can be used for voice services as well.

What are the expected future trends in voice and data tariffs?

Evidently, the era of tariff wars is over. We have witnessed declining tariffs for many years now and it has not helped the sector.  The industry can now expect an upward trend in tariffs for both voice and data services.

However, quality of service (QoS) would be a key determinant for service uptake as customers are willing to pay more for improved coverage and QoS.

What are some of the emerging business opportunities for the operator?

The enterprise segment is one of our key verticals and we have taken several steps to tap the business opportunities presented by it. We have entered the internet data centre space and are offering cloud computing services to our customers. Several of our existing enterprise customers have subscribed to these services as they prefer to access a complete suite of services from a single provider.

Further, we have expanded significantly in terms of our managed data service offerings. We provide them with connectivity as well as equipment and take responsibility for the maintenance of both hardware and bandwidth.

We are also exploring the m-commerce space. We have introduced the mobile money order service with the Indian postal department. Further, we are at advanced stages of talks with some banks for providing m-wallet services. In addition, BSNL has a large asset base in terms of land parcels, telecom factories, towers and optic fibre networks. We are looking to create additional revenue streams from these assets under a public-private partnership model.

What has been the most memorable project that you have undertaken as CMD of BSNL?

The successful finalisation of BSNL’s GSM Phase VII expansion project can be seen as a watershed event during my tenure. Our network was facing both capacity and coverage crunch and we had not been able to induct any equipment in the past six years. The project finalisation was a major turning point. Further, it had a significant positive impact on employee morale as well as the industry’s perception of BSNL.  Further, the tender for an MNGT was finalised and the  project was completed on schedule. NGN project was finalised and equipment is under installation.

These developments have helped in restoring the confidence and faith of all stakeholders in BSNL.