A

PROJECT STUDY REPORT

ON
BSNL,

Financial Overview of Telecom Sector in India

Submitted in partial fulfillment for the

Award of degree of
Master of Business Administration

Submitted By;
Submitted To;
Vishnu Kumar Sharma

Ms.Ruchi Khandelwal

MBA III Sem

,
2009-2011

DEEPSHIKHA INSTITUTE OF MANAGEMENT STUDIES

ISI-17 RIICO INSTITUTIONAL AREA, SITAPURA
JAIPUR

PREFACE

As the part of my MBA curriculum I was required to undergo summer training in a

business organization for eight or six weeks. I approached BHARAT SANCHAR
NIGAM LIMITTED for this purpose and got an opportunity to get training from Team
Leader who readily agreed to extend his cooperation.
The project was assigned to me by the organization. The topic of my project was
Financial Overview of telecom Sector in India. In this record I have put my best
efforts to compile the data to the highest level of accuracy and give my views to the
best of my judgment.

ACKNOWLEDGEMENT
I express my sincere thanks to my project guide, Mrs. Rekha Tambi (Sr. ExecutiveHR & ES) for guiding me right form the inception till the successful completion of the
project. I sincerely acknowledge her for extending their valuable guidance, support
for literature, critical reviews of project and the report and above all the moral
support She had provided to me with all stage of this project.

Vishnu kumar Sharma,

MBA III Sem.

EXECUTIVE SUMMARY

The project is an extensive report on how the BSNL company

markets its strategies and how the company has been able in
tackling the present tough competition and how it is cooping up by
the allegations of the quality of its products. The report begins with
the history of the products and the introduction of the BSNL
company.
This report also contains the basic marketing strategies that are
used by the BSNL company of manufacturing process, technology,
production policy, advertising, collaboration, export scenario, future
prospect and government policies. The report includes some of the
key salient features of market trend issues.
In todays world of cut throat fierce competition, it is very essential
to not only exist but also to excel in the market. Todays market is
enormously more complex. Hence forth, to survive in the market, the
company not only needs to maximize its profit but also needs to
satisfy its customers and should try to build upon there.

Contents
S.no.

Particulars

1.

Introduction

2.

Financial Overview

4.

Telecom profile

Pages

5.

INDIAN TELECOM SECTOR

6.

Research Objective

7.

Research Methodology

8.

A Comprative Swot Analysis

9.

Reactivation Of Dormant Retailers Findings

10.

Suggestions

11.

Annexure

12.

Bibliography

Company Proflie

Introduction

Type

Communication Service Provider

Availability

Countrywide except Delhi & Mumbai

Owner

The Government of India

Key people

S.D. Saxena (CFO); A.K. Sinha (CEO)

Founded

19th century, incorporated 2000

Website

www.bsnl.in

1.1

Overview of the BSNL:

BSNL is India's oldest and largest Communication Service Provider (CSP).

Currently BSNL has a customer base of 64.8 million (Basic & Mobile
telephony). It has footprints throughout India except for the metropolitan cities
of Mumbai and New Delhi which are managed by MTNL . As on March 31 , 2010
BSNL commanded a customer base of 33.7 million Wireline, 3.6 million CDMAWLL and 27.5 million GSM Mobile subscribers. BSNL's earnings for the
Financial Year ending March 31 , 2010 stood at INR 401.8b (US$ 9.09 b) with
net profit of INR 89.4b (US$ 2.02 billion). Today, BSNL is India's largest Telco
and one of the largest Public Sector Undertaking of the country with authorized
share capital of US$ 3.95 billion (INR 17,500 Crores) and networth of US$
14.32 billion.

1.2

Objective of Study:
The main objective of this study is to carry on brief study on Financial

Overview

Of

Telecom Sector in India through this I am able to get the

difference of various assets and liabilities of the BSNL.

Other objectives of this project are as follows:

To identify the various assets amount of the BSNL with respect to

Annual Repots of the BSNL.

Comparative study of Two year Annual reports.

To study the various departments for the needs of assets and use-less
assets amount of BSNL Jaipur city center.

1.3

Profile of Organisation:

Over views of Organisation

History

The foundation of Telecom Network in India was laid by the British sometime in
19th century. The history of BSNL is linked with the beginning of Telecom in
India. In 19th century and for almost entire 20th century, the Telecom in India
was operated as a Government of India wing. Earlier it was part of erstwhile
Post & Telegraph Department (P&T). In 1975 the Department of Telecom (DoT)
was separated from P&T. DoT was responsible for running of Telecom services
in entire country until 1985 when Mahanagar Telephone Nigam Limited (MTNL)
was carved out of DoT to run the telecom services of Delhi and Mumbai. It is a
well known fact that BSNL was carved out of Department of Telecom to provide

level playing field to private telecoms.Subsequently in 1990s the telecom sector

was opened up by the Government for Private investment, therefore it became
necessary to separate the Government's policy wing from Operations wing. The
Government of India corporatised the operations wing of DoT on October 01 ,
2000 and named it as Bharat Sanchar Nigam Limited (BSNL).BSNL operates as
a public sector.

Main Services being provided by BSNL

BSNL provides almost every telecom service, however following are the main
Telecom Services being provided by BSNL in India:-

1. Universal Telecom Sevices : Fixed wireline services & Wireless in

Local loop (WLL) using CDMA Technology called bfone and Tarang
respectively. BSNL is dominant operator in fixed line. As on March 31,
2010

(end of financial year) BSNL had 76% share of fixed and WLL

phones.

BSNL Mobile

Pre-paid Mobile

2. Cellular Mobile Telephone Services: BSNL is major provider of Cellular

Mobile Telephone services using GSM platform under brandname
Cellone. Pre-paid Cellular services of BSNL are know as Excel. As on
March 31, 2010 BSNL had 17% share of mobile telephony in the country.

BSNL Broadband

3. Internet: BSNL is providing internet as dial-up connection (Sancharnet )

and ADSL-Broadband Dataone. BSNL has around 50% marketshare in
broadband in India. BSNL has planned aggressive rollout in broadband
for current financial year.

4. Intelligent Network (IN): BSNL is providing IN services like tele-voting,

toll free calling, premium calling etc.

BSNL Present & Future

Since its corporatisation in October 2000, BSNL has been actively providing
connections in both Urban and Rural areas and the efficiency of the company
has drastically improved from the days when one had to wait for years to get a
phone connection to now when one can get a connection in even hours. Preactivated Mobile connections are available at many places across India. BSNL
has also unveiled very cost-effective Broadband internet access plans
(DataOne) targeted at homes and small businesses. At present BSNL enjoy's
47% of market share of ISP services.

Year of Broadband 2007

10

Former Indian Communications Minister Thiru Dayanidhi Maran had declared

year 2010 as "Year of Broadband" in India and BSNL is gearing up to provide 5
million Broadband connectivity by the end of 2010. BSNL has upgraded existing
Dataone (Broadband) connections for a speed of up to 2 Mbit/s without any
extra cost. This 2 Mbit/s broadband service is being provided by BSNL at a cost
of just US$ 5.5 per month. Further, BSNL is planning to upgrade its broadband
services to Triple play (telecommunications) in 2010.
BSNL has been asked to add 108 million customers by 2010 by Former Indian
Communications Minister Thiru Dayanidhi Maran. With the frantic activity in the
communication sector in India, the target appears achievable, however due to
intense competition in Indian Telecom sector in recent past BSNL's growth has
slowed down.
BSNL is pioneer of Rural Telephony in India. BSNL has recently bagged 80% of
US$ 580 m (INR 2,500 crores) Rural Telephony project of Government of India.

Challenges
During Financial Year 2009-2010 (From April 01 , 2009 to March 31 ,2010 )
BSNL has added 9.6 million new customers in various telephone services
taking its customer base to 64.8 million. BSNL's nearest competitor Bharti Airtel
is standing at a customer base of 39 million. However, despite impressive
growth shown by BSNL in recent times, the Fixed line customer base of BSNL
is declining. In order to woo back its fixed-line customers BSNL has brought
down long distance calling rate under OneIndia plan, however, the success of
the scheme is not known. However, BSNL faces bleak fiscal 2009-2010 as
users flee, which has been accepted by the CMD BSNL.
Presently there is an intense competition in Indian Telecom sector and various
Telcos are rolling out attractive schemes and are providing good customer
services. However, BSNL being legacy operator and its conversion from a

11

Government Department, earns lot of criticism for its poor customer service.
Although in recent past there have been tremendous improvement in working of
BSNL but still it is much below the Industry's Expectations. A large aging
(average age 49 years(appx)) workforce (300,000 strong), which is mostly
semi-illetrate or illeterate is the main reason for the poor customer service.
Further, the Top management of BSNL is still working in BSNL on deputation
basis holding Government employee status thus having little commitment to the
organisation. Although in coming years the retirement profile of the workforce is
very fast and around 25% of existing workforce will retire by 2010, however, still
the workforce will be quite large by the industry standards. Quality of the
workforce will also remain an issue.

BSNL at Jaipur Circle

BSNL Jaipur Circle office is situated in City Center area. This office is
undertaking of office. This office are works various areas like Marketing,
Planning, Administrative, Operation & Management and Finance. Each
department works under GM telecom district.
GM delegates our some duties to DGM. DGM is the head of the
department. These posts are highly responsible because DGM is the main
person of the department and DGM gives various approvals of works. This
approval leaves various effect of the department like financial, working
efficiency, functions of departments and field officer works.
Basically BSNL city center works in departmental approaches or
functions. This office provides a support to other departments or employees of
BSNL. In this office calculated various function of employees like salary of
employees, departmental information, various tenders, payment of vendors,
departmental expenditure of general provident funds etc.

12

But this office run a collection center this collection center collect various
telephones/mobiles/broadband bills.

VISION
TO

SERVICE PROVIDER

BECOME THE LARGEST TELECOM

IN

SOUTH

EAST

ASIA.

MISSION
To provide world class State-of-art

TECHNOLOGY TELECOM SERVICES ON

DEMAND AT AFFORDABLE PRICE .

To Provide world class telecom infrastructure to

DEVELOP

COUNTRY 'S

ECONOMY .

ObjectS

To be the Lead Telecom Services Provider.

To provide quality and reliable fixed telecom service to our customer and
thereby increase customer's confidence.

13

To provide mobile telephone service of high quality and become no. 1 GSM
operator in its area of operation.

To provide point of interconnection to other service provider as per their

requirement promptly.

To facilitate R & D activity in the country.

Contribute towards:

National Plan Target of 500 million subscriber base for India

Broadband customers base of 20 million in India by 2010

BY

2012.

AS PER

BROADBAND .

Implementation of Triple play as a regular commercial proposition

The Company
Bharat Sanchar Nigam Limited (known as BSNL) is a public sector
communications company in India . It is the largest telecommunication company
in India and the sixth largest in the world. Its headquarters are at Statesman
House, Barakhamba Road, New Delhi. It has the status of Mini-ratana - a status
assigned to reputed Public Sector companies in India.
During the current financial year, the management based on physical verification
of fixed assets and inventory and reconciliation of various heads of assets and
liabilities in the subsidiary and general ledgers which has resulted into

14

increase/decrease in the following assets and liabilities taken over as on 01st

October 2000 amounting to net reduction in the assets of Rs. 5,910 lakh (P.Y. - Rs.
25,452 lakh):
In pursuance of the Memorandum of Understanding dated 30th September
2000 executed between Government of India and BSNL, all assets and liabilities in
respect of business carried on by DTS and DTO were transferred to the Company
with effect from 01st October 2000 at a provisional value of Rs. 6,300,000 lakh and
up to previous financial year BSNL has identified net assets of Rs. 6,352,028 lakh
against it.
General Information
No. of Revenue District
Population
No. of Tehsil
Block H.Q.
Total Villages
No. of Villages(Inhabited)

2
1,629,881
6
7
1221
1108

Revenues Strategies
The telecom sector is the most competitive sector post liberalization. This has
resulted in a movement from growth based business model that emphasized growth
in numbers to profit-based model where the success is measured by margins. BSNL
as part of the transition has to adopt both cost reduction and revenue enhancement
measures, which would directly impact profitability.
It is evident that there is a declining trend in basic services and there is
stagnation in cellular revenues. Revenue maximization strategies will have two
components, one internal to the organization and the other external. The internal
aspect would involve an initiative for change of process, technology, organizational

15

structure etc. In this context, revenue assurance is the key to improving the bottom
line for BSNL. This is proactive strategy to capture all revenues due for the services
provided. Presently, BSNL generates bills through different softwares across the
zones of operation, which are disintegrated and provide only basic solutions. The
industry standard for revenue leakage is about 3 to 7% percent of revenue, which in
money terms translates to about Rs.2100 crores for BSNL. Therefore plugging
revenue leakages is just the first and most obvious part of a Revenue Assurance
initiative. The key concerns for BSNL for effective revenue realization are

The delay in customer billing after activation

Time lag between calls generated and billed

Scope of fraud

Non-availability of uniform database.

Therefore the focus should be on immediate implementation of CDR based

billing. This would require huge investment but the return would more than
commensurate. The software should be scalable and be able to incorporate all the
next generation value added services. The implementation of CDR based system
will also generate the following benefits:

Plugging of leakage of revenue.

Formulation of appropriate marketing strategies

16

Management Profile
Chief General Manager
(CGM)
Mr. Hinduja
GM Telecom District
Mr. Prashant Trivedi
Deputy General Manager
(DGM)
(Marketing, Planning &

DGM
(Operation &
Management)

DGM
(Finance)
Mr. S. D. Tyagi

Chief Accounting Officer TR

Account officer TR
1st
Mr. S.S. Bahdoriya

AO Mob.
Mr. Manoj Yadav

CO Strategic Business Plans

AO Telecom
Revenue 2nd
Mr. SC Jain

AO SBP
Mr. Ram Sadal

AO Pay
AONaagar
Pay
Mr.

Mr. Naagar

AO Cash
Mr. Ram
Avatar

Jr. Account Officer

Mr. R.S. Yogik

Section Supervisor
Mr. Chandrshekhar

Sr. Trunk
Supervisor
Mr. K.N. Duwedi

Peon
Mr. Gyasi Ram

Organisation Functional Structure of BSNL Jaipur Circle

SBP Department

17

Products

BSNL LANDLINE

PHONE PLUS SERVICE

NEW TELEPHONE CONNECTION

PERMANENT CONNECTION

CONCESSION IN RENTALS

SHIFT OF TELEPHONE

POSTPAID

PREPAID

UNIFIED MESSAGING

GPRS/WAP/MMS

DEMOs

TARIFF

SMS & BULK SMS

BSNL MOBILE

BSNL WLL

INTERNET SERVICES

NETWORK

BROADBAND

TYPES OF ACCESS

WI-FI

CO-LOCATION SERVICE

BSNL WEB HOSTING

INTERNET TARIFF

DIAL UP INTERNET

SMS& BULK SMS

BSNL BROADBAND

18

REGISTER ONLINE

TARIFF

USO FUNDED RURAL BROADBAND

FAQ

CHECK USAGE

BSNL MANAGED NETWORK SERVICES

BSNL MPLS-VPN

ISDN

INTELLIGENT NETWORK

FREE PHONE SERVICE

PREMIUM RATE SERVICE

INDIA TELEPHONE CARD

VIRTUAL PRIVATE NETWORK (VPN)

VOICE VPN

UNIVERSAL NUMBER

UNIVERSAL PERSONAL NUMBER

TELE VOTING

VIDEO CONFERENCING

OVERVIEW

TARIFF

FAQ

AUDIO CONFERENCING

OVERVIEW

TARIFF

FAQ

OVERVIEW

SERVICES ON I NET

I NET

19

USING ON I NET

I NET CONNECTIONS

TARIFF

TELEX/ TELEGRAPH

TELEX/ TELEGRAPH

TARIFF

EPABX

FREE EPABX

TARIFF

CENTREX

CENTREX TARIFF

EPABX

20

Profile of company top Management

Director (Operations) - Shri Rajesh Wadhwa

Shri Kuldeep Goyal has taken over as Chairman & Managing Director of BSNL on
August 1, 2007. Shri Kuldeep Goyal joined the Indian Telecommunication Service of
Govt. of India in 1972. He is an Engineering Graduate from IIT Roorkee.
Just prior to taking over as CMD, BSNL, Shri Goyal has worked as Director
(Planning & New Services) and was responsible for planning and execution of
strategy for expansion of BSNL's network.
With more than 35 years of service, Shri Goyal has vast experience in telecom
sector viz. planning, installation, operation and maintenance of wirelines and
wireless services, data services, computerization of various activities in telecom
network and provision of value added services.
While working as chief General Manager, Maharashtra Telecom circle, he was in
charge for operations, planning and expansion of telecom network of the largest
circle of BSNL and contributed to rapid growth of telecom networks in Maharashtra
and Goa. During his short tenure of ten months as Executive Director, MTNL
Mumbai, he was able to double the connections in GSM network of MTNL Mumbai
and MTNL's market share was enhanced from 8.93% to 15.5%. During his tenure,
broadband service was also started in January 2005 and 40000 subscribers were
enrolled during a short period of nine months. Shri Goyal has worked in Yemen on a
foreign project through Telecommunications Consultants India Ltd. He was also a
Member of National Working Group of ITU-T Study Group 2 on operational aspect
of service,

21

PROVISION AND PERFORMANCE OF TELECOM NETWORKS AND PARTICIPATED IN

MEETING OF

ITU-T S TUDY GROUP 2

AT

GENEVA. SHRI GOYAL

HAS DELIVERED A

NUMBER OF TALKS ON VARIOUS TOPICS RELATING TO TELECOM IN VARIOUS FORUMS

LIKE

GSM ASSOCIATION, INSTITUTE

OF

ENGINEERS , INSTITUTE

TELECOMMUNICATIONS ENGINEERS, CII, D OOR DARSHAN

ARTICLES

AN

- "TELECOMMUNICATION INDUSTRY

INTERNATIONAL PERSPECTIVE " AND

PUBLISHED IN

AT A

"TRADE

IN

AND

OF

ELECTRICAL

A.I.R. S OME

GLANCE", "UNIVERSAL

AND

OF HIS

ACCESS

TELECOMMUNICATIONS "

HAVE BEEN

TELECOMMUNICATIONS JOURNAL .

DIRECTOR (FINANCE )- SHRI S.D.SAXENA

SHRI S.D.SAXENA
BASIS IN

WAS APPOINTED

APRIL 2002

REGULAR BASIS SINCE

RECORD .

HE

IS

DIRECTOR (F INANCE), BSNL

AND HAS BEEN WORKING AS

29.10.2003. S HRI SAXENA

M.S C. (PHYSICS )

AND

ON OFFICIATING

DIRECTOR (FINANCE)

HOLDS AN EXCELLENT ACADEMIC

MBA (FINANCIAL MANAGEMENT ). WINNER

MANY AWARDS AND MEDALS , HE WAS AWARDED

CHANCELLOR 'S GOLD MEDAL

BEING THE MOST OUTSTANDING STUDENT IN THE

AGRA UNIVERSITY

1967. PRIOR

INDIA

EXAMINATION OF

RAJASTHAN
ASSOCIATED

GOVERNMENT

TO JOINING THE

AT

1972

JAIPUR

WITH

ORGANIZATIONS
AND

SHRI S.D. SAXENA,

D URING

INCLUDING

IAS,

WAS ALSO

22

WITH

DIRECTOR (F)

ETC.
OF

THIS PERIOD HE WAS

TATA INSTITUTE

C-DOT

SHRI SAM PITRODA

IN THE

OF

THE NOTABLE

SPECIAL MENTION CAN BE MADE OF

C-DOT

FOR

UNIVERSITY

ATOMIC ENERGY. AMONG

WHERE HE WAS INVOLVED IN SETTING UP OF

PADMSHRI G.B. MEEMAMSI . H E

AT THE

OF

IN THE YEAR

THROUGH THE

PHYSICS

AND TAUGHT FOR SIX YEARS .

FUNDAMENTAL RESEARCH (TIFR)

ASSIGNMENTS OF

OF

HE WAS A LECTURER IN

VARIOUS

ON

AND

E-10 B PROJECT

FOR

INDUCTION

ELECTRONIC SWITCHING SYSTEM

OF

INDIAN TELECOM

IN

NETWORK.
HE

IFA

WAS

OF

MAHANAGAR TELEPHONE NIGAM LTD . FOR 7

GDR ISSUE,

ACTIVELY INVOLVED IN THE

BROUGHT OUT BY AN INDIAN
A MEMBER
SIGNIFICANT

INDIAN
OF

CORPORATE

RATED AS ONE OF THE BEST

INCLUDING PRIVATE COMPANIES .

RAKESH MOHAN INFRASTRUCTURE COMMITTEE

OF

RECOMMENDATIONS

FOR

INFRASTRUCTURE SECTOR .

THE

YEARS AND WAS

STUDY

GROUP

TELECOMMUNICATION

III

UNION.

RAPPORTEUR GROUP

THE

SHRI SAXENA
UNDER

HE

WAS

STUDY GROUP III

OF

GROWTH

AND

AEGIS

WAS

DEVELOPMENT

OF

CHAIRMAN

THE

HE

WHICH MADE

HAS BEEN AN ACTING

THE

GDR S

OF

MEMBER

INTERNATIONAL

OF

SPECIAL

THE

FOR TELECOMMUNICATION STATISTICS

WHICH MADE SIGNIFICANT CONTRIBUTIONS FOR THE PRESENTATION OF TELECOM

STATISTICS ON A

SHRI SAXENA

GLOBAL

WAS ELECTED

OCEANIA (TAS) G ROUP

OF

HE

ITU

SCALE .

HELD IN

CHAIRMAN

IN THE

OF THE

TARIFF GROUP

FOR

ASIA

AND

WORLD TELECOM STANDARDIZATION ASSEMBLY

FLORIANOPOLIS , BRAZIL .

HAS SPECIALISED IN

TELECOM COMPANIES

TECHNO -ECONOMIES

WITH EMPHASIS ON

AND

TARIFF

FINANCIAL MANAGEMENT
AND

TARIFF

OF

BASED MARKETING .

DIRECTOR (PLANNING & NEW SERVICES )-SHRI R.K.AGGARWAL

SHRI RAKESH KUMAR AGARWAL

SCIENCE, BANGALORE
DELHI

IN

IN

1973

1975. T HEREAFTER

HAS DONE HIS

AND THEN

HE JOINED

B.E.

M.T ECH

FROM INDIAN INSTITUTE OF

IN

COMMUNICATIONS

DEPARTMENT

OF

IIT

TELECOMMUNICATIONS

AND WORKED IN VARIOUS FIELDS OF TELECOMMUNICATIONS .

23

FROM

HE

DID INSTALLATION

C-400 C ROSS BAR EXCHANGES

OF

TILL

TRAINING FOR THE INSTALLATION OF

MAKE IN

1983

WAS

DOT

E-10B EXCHANGES

FOR

REPRESENTATIVE FOR THE

TO FINALIZE GATEWAY SWITCHES FOR

FOR

APT CONFERENCE

DIRECTOR, TCIL

IN

HE

FOR

E-10B

DEPUTY GENERAL MANAGER

MTNL, MUMBAI

FROM

VSNL. DURING 1990

IN INDONESIA .

OF

1983

TILL

SYSTEM SELECTION COMMITTEE

FROM

1991

TO

1991.

SET UP

HE REPRESENTED INDIA

WAS ALSO DEPUTED AS

SULTANATE -OF-OMAN

TO

FRANCE

WAS SENT TO

DIGITAL ELECTRONIC EXCHANGE

AND THEREAFTER WORKED AS

(INSTALLATION)
HE

1983. HE

1996

PROJECT

WHERE HE

HANDLED ALL THE PROJECTS RELATED TO SETTING UP THE EXTERNAL PLANT

NETWORK FOR COPPER CABLE AND

OMAN . FROM 1996-98

OPTICAL FIBER NETWORK

HE WORKED AS

NICOBAR TELECOM CIRCLE

SULTANATE -OF-

CHIEF GENERAL MANAGER, ANDAMAN &

AND THEREAFTER HANDLED THE CHARGE OF

TELECOM DISTRICT, RAJASTHAN

MANAGER (DEVELOPMENT )

IN

IN

FROM

PUNE

IN

1998-99. H E
1999

WAS POSTED AS

JAIPUR

GENERAL

AND WAS IN CHARGE OF COMPLETE

PLANNING AND INSTALLATION OF ALL SWITCHING AND TRANSMISSION NETWORK IN

PUNE DISTRICT. HE

WAS ALSO IN-CHARGE OF COMPUTERIZATION AS WELL AS

PUNE.

INTRODUCTION OF NEW SERVICES IN THE NETWORK IN

HE

WAS CLOSELY INVOLVED WITH PLANNING , EVALUATION OF TENDER AS WELL AS

IMPLEMENTATION AND MAINTENANCE OF

SINCE

2002. AS CHAIRMAN

OF THE

GSM MOBILE SERVICES

VALIDATION COMMITTEE

CARRIED OUT THE VALIDATION OF MOBILE SWITCH FOR

PUNE. HE

WAS IN- CHARGE OF ALL THE

SERVICES

FOR

WEST ZONE

PUNE

WEST ZONE

WEST ZONE

FOR

INSTALLED AT

GSM MOBILE

NAMELY PRE -PAID PLATFORM ,

BILLING SYSTEM AND VALUE ADDED SERVICES FOR MOBILE .

EXPANSION OF MOBILE NETWORK IN

MAHARASHTRA

HE SUCCESSFULLY

CENTRAL PLATFORMS

INSTALLED AT

IN

FOR

LATER

ON THE FINALIZED

MILLION LINES AND WAS

INVOLVED IN THE COMMISSIONING AND MAINTENANCE OF

GSM MOBILE NETWORK. HE

WAS ALSO CLOSELY INVOLVED WITH THE SETTING UP OF

CALL CENTRE

HANDLING

CUSTOMER CARE

2006.IN JUNE, 2006,

TELECOM CIRCLE. HE
NEW SERVICES)

IN

AND

MARKETING

HE WAS POSTED AS

OF

MOBILE SERVICES

W.E.F.

TILL

PUNE

FOR

MAY ,

CHIEF GENERAL MANAGER , BSNL B IHAR

HAS TAKEN OVER THE CHARGE OF

BSNL BOARD

AT

DIRECTOR (PLANNING &

11TH APRIL, 2008

24

PROFILE OF THE COMPANYS BUSINESS

1. BASIC AND LIMITED MOBILE TELEPHONE SERVICES
BSNL

IS THE LEADING SERVICE PROVIDER IN THE COUNTRY IN THE

SERVICES. AS
THAN

OF NOW MORE THAN

2.2.M ILLION

EXISTING .

PLANS

BSNL

35

TELEPHONES IN THE

MILLION

BASIC TELEPHONE

DIRECT EXCHANGE LINES &

LIMITED MOBILE

TELEPHONE

MORE

SERVICES

ARE

HAS PROVIDES A NUMBER OF ATTRACTIVE TARIFF PACKAGES

&

WHICH SHALL FURTHER STRENGTHEN ITS SUBSCRIBER BASE .

2. CELLULAR MOBILE TELEPHONE SERVICES

BSNLs GSM Technology based Cellular Mobile Network has reached a long way,
covering more than 6400 towns, with a subscriber base of over 1.54 crore as on
31st Jan. 2009

OUT OF WHICH

1.16 CRORE

CELLULAR TELEPHONES ARE IN THE

PREPAID SEGMENT .

3. INTERNET SERVICES
BSNL offers Dialup Internet services to the customers by Post-paid service with the
brand name Net one, and pre-paid service with the brand name Sancharnet. The
post-paid service is a CLI based access service, currently operational in 100 cities.
Sancharnet is available on local call basis throughout India to ISDN and PSTN
subscribers. The Internet Dhaba scheme of the Company aims to further promote
Internet usage in rural and semi urban areas.

To keep pace with the latest and varied value added services to its customers,
BSNL uses IP/MPLS based core to offer world class IP VPN services. MPLS based
VPNs is a very useful service for Corporate, as it reduces the cost involved as well

25

as the complexity in setting up VPNs for customers networking. As on 31.03.2005,

your Companys total Internet customer base was 17, 98,089 and total Internet
Dhabas were 4143. A total of 708594 dial up Internet connect IONS
DURING

2007-2008,

1215980

MORE

31.1.2009,

AGAINST A TARGET OF

DIAL

UP CONNECTIONS

THERE WERE

2367404

LAKHS .

DURING THE

BSNL
YEAR

HAVE BEEN GIVEN

PLANS TO GIVE

2008-09. A S

ON

BSNL

NET

INTERNET SUBSCRIBERS WORKING IN

WORK.

4. Intelligent Network
Intelligent Network Services is a service that incorporates several value added
facilities, thoroughly designed to save time and money, and enhance productivity. At
present, your company offers Free Phone (FPH), Premium Rate Service (PRM),
India Telephone Card (ITC), Account Card Calling (ACC), Virtual Private Network
(VPN), Universal Access Number (UAN) and Tele voting IN services. With the
commissioning of five numbers of new technology IN Platforms (Four General
purpose and One Mass Calling) at Kolkata, Bangalore, Ahmadabad and Hyderabad,
the India Telephone Card facility and new value added services are being provided
throughout the country. Activation of these new IN platforms had increased the sale
of ITC Cards taking the

FIGURE TO

RS.265

CRORES IN

2007-08

ALONE .

5. BROADBAND SERVICES
BSNL has launched its Broadband Services under the brand NAME DATA One on
14/1/2005. This offers services like High Speed Internet Access with speed ranging
from 256 Kbps to 8 Mbps. Other services like streaming video, Video on Demand,
Bandwidth on demand etc., have also been planned. As on 31.12.2005, there were
more than 356000 broad band connection provided by the BSNL. There are plans to
give 2 million aND 3

MILLION CONNECTIONS IN

26

2008

AND

2009

RESPECTIVELY .

DEVELOPMENT OF RURAL TELECOM NETWORK

1. Rural DELs
AS

ON

31.03.2008,

IN

BSNL S

NETWORK , A TOTAL OF

TELEPHONE CONNECTIONS WERE WORKING .

CRORE RURAL TELEPHONES WORKING IN

AS

BSNL

ON

1.356

31.1.2009,

CRORE RURAL

THERE ARE

1.425

NETWORK .

2. (a) VILLAGE Public Telephones (VPTs) & RCPs:BSNL, in its unstinted efforts to make the slogan Connecting India, a reality, had
provided VPTs in 5, 18,992 villages up to 31.03.2008. The Company entered into an
agreement with USO Fund for expansion of rural telecom network by November
2009, by providing VPTs in 66,822 undisputed, undisturbed, accessible and
inhabited villages having population more than 100 as per Census, 1991 in the
country. BSNL PROVIDED VPTs in 5, 28,886 villages up to 31.01.2008. THERE
PLANS TO REPLACE ALL

123194 MARR VPT S

MARR VPT S

AS

COUNTRY. AS

ALREADY REPLACED IN THE COUNTRY BY

COMMITTED TO PROVIDE THE

AGREEMENT .

IN THE

RURAL COMMUNITY PHONES

OF NOW AROUND

13713 RCP S

OF NOW TOTAL

BSNL. BSNL

AS PER THE

ALREADY PROVIDED BY

BSNL.

There are more than 2 million PCOs working in the BSNL Network out of which

27

ALSO

USO FUND

(b) Public Telephones:-

around 1 million PCOs are having STD/ISD.

ARE

C. NETWORK MANAGEMENT
BSNL is committed to provide a robust state of the art infrastructure that will provide
stable and superior services to its customers. Accordingly, the MLLN network
covering more than 200 cities was made operational in May 2004. Since then, about
22000 circuits have been provided on this network. This has provided high level of
stability to the leased circuits and capability to offer N X 64 Kbps circuits. Keeping in
view the growing demand of leased circuits, the network is being expanded to cover
about 50 more locations and additional capacity at many existing locations is also
being provided.
To improve the operational efficiency of CCS 7 signaling, stand-alone signaling
transfer point (SSTP) equipment is being procured. This will also enable the
Company to measure signaling traffic of other operators, who are using its signaling
network for exchanging messages, especially with regard to cellular services. BSNL
has more than 4.7 Lakhs Route Kilometers of optical fiber network in the country &
has installed capacity more than 6.4 million lines for the TAX meant for the STD/ISD
network.

D.

Setting up KU Band VSAT network

As regards the KU Band VSAT network equipment, the hub of this network is being
set up at BANGALORE; The equipment has been installed and expected to be
commissioned shortly. This will help your Company, to become a service provider
with all types of media equipment i.e. OFC, Microwave and satellite for provision of
bandwidth, this will also enable the Company to offer composite solutions to its
customers.

28

E. Policy on transmission network maintenance

TELECOM CIRCLES

HAVE

LARGE

TRANSMISSION

NETWORKS.

TO

IMPROVE

THE

MAINTENANCE OF TRANSMISSION NETWORK, GUIDELINES FOR ROUTE PARTIES AND

VEHICLES HAVE BEEN FORMALIZED .

TELECOM TERRITORIAL CIRCLES

ARE ALSO BEING

CONNECTED WITH COMPUTERIZED NETWORK FOR BOOKING OF TRANSMISSION SYSTEM

FAULTS , WITH A VIEW TO IMPROVE FOLLOW UP AND FASTER RESTORATION OF FAULTS .

F. Annual Maintenance contracts for switching system & WLL

COMPREHENSIVE AMC,

WHICH INCLUDES HARDWARE AND SOFTWARE MAINTENANCE

AND UPGRADE , HAS BEEN ARRANGED WITH THE RESPECTIVE EQUIPMENT SUPPLIERS .

INITIAL

FEEDBACK SUGGESTS THAT, AS A RESULT OF PREVENTIVE AND CORRECTIVE

MAINTENANCE SUPPORT , THE PERFORMANCE OF SWITCHES IS IMPROVING .

IN ENTERING INTO
RESOLVED

AND

AMC

WITH RURAL

PROCEDURES

SUPPORT BECOMES AVAILABLE .

IMPROVING .

AMC

WLL

STREAMLINED

AS

DIFFICULTIES

EQUIPMENTS SUPPLIERS HAVE BEEN

SO

THAT

ADEQUATE

A RESULT , THE PERFORMANCE OF

MAINTENANCE

WLL

NETWORK IS

ARRANGEMENTS HAVE ALSO BEEN MADE WITH SUPPLIERS OF

FWTS

AND HAND HELD TERMINALS .

G. Provision of SMPS with rural WLL DELs

WITH

A VIEW TO INCREASE THE TALK TIME AND TO TAKE CARE OF POOR POWER SUPPLY

CONDITIONS IN RURAL AREAS , STEPS ARE TAKEN FOR PROCUREMENT OF SWITCH MODE
POWER SUPPLY
BATTERY.

(SMPS)

ALL

PROVISIONS FOR

NEW

WITH

7 AH

PROCUREMENTS

SMPS

WITH

7 AH

OF

WLL

EQUIPMENT

WILL

NOW

BATTERY TO BE SUPPLIED ALONG WITH

29

HAVE

FWTS

H. Fault Repair Services

ACHIEVEMENTS
SL. N O.

PARAMETERS

1
2
3

FAULT RATE
TRUNK EFFICIENCY
CCR

(BASIC SERVICE)
YEAR
2009-10
ACHIEVEMENT ACHIEVEMENT
8.4
7.6
88.4
89.1
2008-09

i)

LOCAL

57.85

59.89

ii)

JUNCTION

47.88

54.18

iii)

STD

40.57

43.70

FAULT

AT A GLANCE

CLEARANCE

i)

SAME

DAY

75.78

77.30

ii)

NEXT

DAY

90.29

90.20

iii)

WITHIN 7

98.23
0.87

98.70
0.58

DAYS

REPEAT FAULTS

I. COMPUTERISATION
IMPLEMENTATION

OF I NTER

HAS BEEN COMPLETED .

CARE

AND

OPERATOR BILLING

YOUR COMPANY

CONVERGENT BILLING

EFFECTIVE AND EFFICIENT BILLING

ACCOUNTING

PLANS TO PROVIDE

SYSTEM .

&

AND

THIS

WILL HELP

CDR

SYSTEM
BASED

COMPANY

(IOBAS)

CUSTOMER

IN PROVIDING

CUSTOMER CARE SOLUTIONS FOR ITS FIXED LINE

SUBSCRIBERS . I T ENVISAGES BUILDING OF COUNTRY WIDE INTRANET TO REDUCE THE

COST OF OPERATION , INCREASE REALIZATION , STOP LEAKAGE OF REVENUE AND
MINIMIZE FRAUDS , BESIDES PROVIDING ROUND THE CLOCK BEST CUSTOMER CARE
SERVICES TO THE

CALL

COMPANYS

SUBSCRIBERS .

CENTER FACILITY HAS BEEN INTRODUCED FOR

71 SSA S,

WHICH IS A SINGLE

POINT APPROACH FOR ADDRESSING ALL CUSTOMER NEEDS CUM GRIEVANCES .

BASED

PUBLIC

GRIEVANCE

MANAGEMENT SYSTEM

30

WEB

HAS BEEN IMPLEMENTED FOR

SPEEDY DISPOSAL AND MONITORING OF PUBLIC GRIEVANCES .

MANAGEMENT

WEB

PACKAGE HAS ALSO BEEN INTRODUCED , THROUGH

BASED INVENTORY

WHICH;

MATERIAL

MANAGEMENT FUNCTIONS ARE BEING COMPUTERIZED GRADUALLY IN DIFFERENT

CIRCLES .

ONLINE MOBILE BILL

VIEWING FACILITY HAS BEEN MADE AVAILABLE TO ALL

CELL ONE MOBILE CUSTOMERS (ALL STATES)

(HTTP:// BSNL .IN). DUPLICATE TELEPHONE

THROUGH

COMPANYS PORTAL

BILL VIEWING FACILITY FOR LANDLINE

WEBSITES

TELEPHONE HAS ALSO BEEN MADE AVAILABLE AT MANY PLACES THROUGH

OF RESPECTIVE TELECOM CIRCLES .

J. BUSINESS DEVELOPMENT

BSNL

IS OFFERING CUSTOMIZED ENTERPRISE NETWORK SOLUTION AND SERVICES TO

THE CORPORATE CUSTOMERS ON TURNKEY BASIS.

THE COMPANY

HAS EMPANELLED

SYSTEM INTEGRATORS AS BUSINESS ASSOCIATES TO IMPLEMENT THE

THROUGH LEASED LINE /

WAN

MPLS. Y OUR COMPANY

NETWORK OF CORPORATE LIKE

WORKS WERE AWARDED TO

BSNL

BSNL

HAS ALSO ENTERED INTO

SUCH AS

SOLUTION

HAS PROVIDED BANDWIDTH FOR

SBI, PNB, ICICI, HPCL

ETC.

SOME

OF THE

AFTER COMPETITIVE BID.

MOU S

NTPC, BPCL, U NION BANK

IFFCO, MCX, PNB

WAN

IN THE YEAR

WITH A NUMBER OF LEADING CORPORATE

OF

INDIA (UBI), I NDIAN AIRLINES (IAL),

2008-2009

FOR PROVIDING TOTAL TELECOM

SOLUTION AND FOR HAVING SYNERGY OF OPERATION WITH THESE ORGANIZATIONS .

EPABX

MANUFACTURERS HAVE BEEN EMPANELLED TO PROVIDE

EPABX SYSTEMS
INITIATIVE

TO

FREE

OF COST

TO CORPORATE CUSTOMERS AS A BUSINESS DEVELOPMENT

RETAIN

THE

BIG

AGREEMENT HAS BEEN SIGNED WITH

CORPORATE

RAIL TEL,

31

SUBSCRIBERS .

AN

EXCLUSIVE

TO PROVIDE TELECOM SERVICE ON

REVENUE SHARE BASIS BY

CALL CENTRE S,

RAILWAYS .

YOUR

FURTHERMORE ,

FOR UTILIZING

ANTENNAS

PRASAR BHARTI

AND

FOR FASTER ROLLOUT OF

COMPANY

FOR CENTRALIZED ENQUIRY FOR

HAS ENTERED INTO AN AGREEMENT

RAIL TELS

TOWERS FOR INSTALLING THE

GSM

GSM NETWORK .

K. INTERNATIONAL LONG DISTANCE (ILD)

SUBSEQUENT

TO

THE

SIGNING

OF

MICROWAVE LINK BETWEEN INDIA AND

HAS STARTED ITS DIRECT

ILD

MOU

SRI LANKA

HAS BEEN COMMISSIONED .

SRI LANKA

SERVICES TO

LINK , WHICH WAS LAUNCHED BY

SRI LANKA TELECOM (SLT),

WITH

HONBLE MOC

AT

BSNL

UTILIZING THIS MICROWAVE

CHENNAI

ON

16TH OCTOBER

2009.
INTERNATIONAL

SERVICE

AGREEMENTS

INTERNATIONAL CARRIERS VIZ .

FOR

ILD

TRAFFIC

WITH

LEADING

TELEGLOBE CANADA, TELECOM ITALIA, MCI USA, SRI

LANKA TELECOM, SINGTEL OPTUS, FRANCE TELECOM

THE FIRST PHASE , OUTBOUND

ILD

ETC., HAVE BEEN SIGNED .

IN

TRAFFIC IS BEING SENT THROUGH THESE

CARRIERS .

BSNL
LANKA

HAS ALSO PLANNED TO LAY THE UNDERSEA SUBMARINE CABLE BETWEEN

AND

INDIA.

IDENTIFIED AS

THE

LANDING STATION FOR SUBMARINE CABLE HAS BEEN

TUTICORIN (TAMILNADU). THIS

CABLE WILL PROVIDE CONNECTIVITY TO

OTHER INTERNATIONAL CABLE SYSTEM FOR CARRYING VOICE

BSNL

IS UPGRADING ITS

KOLKATA,

SRI

& DATA

TRAFFIC .

4 LEVEL-I TAX S I.E., MUMBAI , CHENNAI , NEW DELHI ,

TO INTERNATIONAL

GATEWAY

CAPABILITY ALONG WITH THE SETTING UP OF

MONITORING FACILITY AT THESE STATION .

32

L. CUSTOMER CARE

BSNL,

WITH ITS

ENDEAVOUR

FOR HIGH CUSTOMER SATISFACTION , HAS BEEN PAYING

GREAT ATTENTION IN THIS AREA , BY MEANS OF OPENING OF MORE AND MORE

CUSTOMER SERVICE CENTERS . I N ITS ONGOING

ENDEAVOUR

TO EXPAND MODES OF

BILL PAYMENT OPTIONS FOR ITS CUSTOMERS , SEVERAL NEW ARRANGEMENTS ARE IN
ADVANCED STAGE OF NEGOTIATION /FINALIZATION /IMPLEMENTATION .
INCLUDE :

SBI;
AT

R ECHARGE

OF

EXCEL

BILL PAYMENT THROUGH

BANGALORE , GURGAON

PRE - PAID CARDS THROUGH THE

M/ S EASY BILL

AND

NOIDA

SOME

ATMS

OF

OF THESE

PNB

RETAIL OUTLETS PRESENTLY AVAILABLE

LIKELY TO BE EXPANDED TO OTHER CITIES;

PAYMENT THROUGH INTERNET /ECS USING THE SERVICES OF INTERMEDIARIES

BILL DESK

AND

M/ S BILL JUNCTION

AND

M/ S

RESPECTIVELY , AND, THROUGH CREDIT /DEBIT

CARDS .

M. TELECOM FACTORIES

THE TELECOM
KHARAGPUR ,

FACTORIES

JABALPUR ,

OF

BSNL

RICHHAI ,

LOCATED

BHILAI

AND

AT

KOLKATA, GOPALPUR ,

MUMBAI

MANUFACTURING UNITS CURRENTLY ENGAGED IN PRODUCTION OF

PILLAR, CT BOX, DP BOX, LINE JACK UNIT , TOWERS

ACCESSORIES, FDMS
WITH

ETC .

AND

ARE

IN-HOUSE

PAY PHONES, MINI

SS DROP

WIRE,

OFC

DURING 2008-09,

A VIEW TO USE THE FACTORIES INFRASTRUCTURE AND WORKFORCE GAINFULLY ,

EFFORTS ARE BEING MADE TO TIE UP WITH OTHER TECHNOLOGY PROVIDERS ETC.

N. OBLIGATIONS

1. Towards customers and dealers

33

TO

PROMPT , COURTEOUS

PROVIDE

AND EFFICIENT

SERVICE

AND QUALITY

OF

PRODUCTS /SERVICES AT FAIR AND REASONABLE SERVICES .

2. Towards employees

DEVELOP

THEIR

CAPABILITY

AND

ADVANCEMENT

THROUGH

APPROPRIATE

TRAINING AND CAREER PLANNING

EXPEDITIOUS

FAIR

REDRESSAL OF GRIEVANCES

DEALINGS WITH RECOGNIZED REPRESENTATIVES OF EMPLOYEES IN

PURSUANCE OF HEALTHY TRADE UNION PRACTICES AND SOUND PERSONNEL

POLICIES

3. Towards the Society Corporate Social Responsibilities

CORPORATE SOCIAL RESPONSIBILITIES

BSNL

IS COMMITTED TO PROVIDE QUALITY

TELECOM SERVICES

PRICE TO THE CITIZENS OF THE REMOTEST PART OF THE

AT AFFORDABLE

COUNTRY. BSNL

ALL EFFORT TO ENSURE THAT THE MAIN OBJECTIVES OF THE NEW

1999 ( SALIENT
ACCESS

IS MAKING

TELECOM POLICY

POINTS INDICATED BELOW ) ARE ACHIEVED :

TO TELECOMMUNICATIONS IS OF UTMOST IMPORTANCE FOR ACHIEVEMENT OF

THE COUNTRY 'S SOCIAL AND ECONOMIC GOALS .

AVAILABILITY

OF AFFORDABLE AND

EFFECTIVE COMMUNICATIONS FOR THE CITIZENS IS AT THE CORE OF THE VISION AND
GOAL OF THE NEW

STRIVE

TELECOM

POLICY

1999.

TO PROVIDE A BALANCE BETWEEN THE PROVISION OF UNIVERSAL SERVICE TO

ALL UNCOVERED AREAS , INCLUDING THE RURAL AREAS , AND THE PROVISION OF HIGH -

34

LEVEL

SERVICES

CAPABLE

ECONOMY ENCOURAGE

OF

MEETING

DEVELOPMENT

OF

THE

NEEDS

OF

COUNTRY 'S

THE

TELECOMMUNICATION

FACILITIES

IN

REMOTE , HILLY AND TRIBAL AREAS OF THE COUNTRY ;

TRANSFORM

IN A TIME BOUND MANNER , THE TELECOMMUNICATIONS SECTOR TO A

GREATER COMPETITIVE ENVIRONMENT IN BOTH URBAN AND RURAL AREAS PROVIDING

EQUAL OPPORTUNITIES AND LEVEL PLAYING FIELD FOR ALL PLAYERS .

N. EMPLOYEE S WELFARE ACTIVITIES

COMMITMENT

TOWARDS THE PRINCIPLES OF CORPORATE SOCIAL RESPONSIBILITIES IS

INBUILT WITHIN THE CORPORATE PHILOSOPHY OF

WELFARE

PROGRAMMES ,

WITH

CONTINUOUSLY IMPLEMENTED BY THE

O.

FOCUS

BSNL. A

ON

THE

VERY WIDE RANGE OF

EMPLOYEES

STAFF WELFARE BOARD

OF THE

WELFARE

IS

COMPANY.

Assistance during natural calamities

BSNL

ALWAYS REMAINS AWAKE OF ITS RESPONSIBILITY AS A CORPORATE CITIZEN .

WHEN

THE DESTRUCTIVE

COMPANY

TSUNAMI

HIT IN THE
TIME .

INDIAN

SHORES ,

BSNL

SWUNG INTO ACTION IMMEDIATELY FOR PROVIDING RELIEF TO THOSE

AFFECTED IN THE COASTAL AREAS .

AREAS OF

WAVES STRUCK THE

TAMIL NADU, KERALA

TSUNAMI -

BSNL

COMMUNICATION

AND THE

ANDAMAN

NETWORKS AT THE

AND

NICOBAR ISLANDS

WORST

WERE PROMPTLY RESTORED WITHIN THE SHORTEST POSSIBLE

ALONG WITH THE EMPLOYEES CONTRIBUTED AN AMOUNT OF

LAKHS TO THE

COASTAL

RS. 2,207

PRIME MINISTERS RELIEF FUND . TELEPHONE SERVICES

35

WERE

RESTORED

IN

RECORD

TIME

IN

THE

FLOOD - HIT

AREAS

OF

GUJARAT

AND

COMPANY

ARE

MAHARASHTRA .

1.2 POWERS & DUTIES OF OFFICERS AND WORKMEN

THE

POWERS

&

DUTIES OF THE OFFICERS AND WORKMEN OF THE

DERIVED MAINLY FROM JOB DESCRIPTIONS , MANUALS , TERMS AND CONDITIONS OF

APPOINTMENT AND

THE

DELEGATION

WORKMEN OF THE

OPERATIONS OF THE
IN

THE

WHILE

OF

COMPANY

COMPANY,

MEMORANDUM

AUTHORITIES

ENUNCIATED BY THE

ARE APPOINTED FOR CARRYING OUT THE BUSINESS

WHICH ARE IN LINE WITH THE OBJECTIVES SPECIFIED

OF

ASSOCIATION

OF

THE

DISCHARGING DUTIES AND RESPONSIBILITIES , OFFICERS

COMPANY

COMPANY.

&

COMPANY.
WORKMEN OF THE

ARE COMPLYING WITH THE APPLICABLE PROVISIONS OF STATUTES AND

RULES AND REGULATIONS FRAMED THERE UNDER

1.3 PROCEDURES FOLLOWED IN THE DECISION-MAKING PROCESS,

INCLUDING CHANNELS OF SUPERVISION AND ACCOUNTABILITY

The decisions making process of the Company follows the

following Channel

BOARD OF DIRECTORS

CHAIRMAN AND MANAGING DIRECTOR

36

1.4 THE NORMS SET FOR DISCHARGE OF FUNCTIONS

THE COMPANY

HAS WELL DEFINED PROCEDURES AND GUIDELINES IN THE FORM OF

DELEGATION OF POWERS, LAID DOWN POLICIES AND GUIDELINES , MANUALS WITH A

VIEW TO ENSURE COMPLIANCE OF PROVISIONS OF VARIOUS STATUTES , RULES AND
REGULATIONS AND THE GUIDELINES OF

CENTRAL VIGILANCE COMMISSION

1.5

THE

RULES,

DEPARTMENT

OF

PUBLIC ENTERPRISES ,

AND OTHER CONCERNED ORGANIZATIONS .

REGULATIONS,

INSTRUCTIONS,

MANUALS

AND

RECORDS HELD BY THE COMPANY OR UNDER ITS CONTROL OR USED

BY ITS EMPLOYEES FOR DISCHARGE OF FUNCTIONS
THE

OVERALL OBJECTIVES AND FRAMEWORK OF RULES AND REGULATIONS OF THE

COMPANY
THE

IS LAID DOWN IN THE

MEMORANDUM

COMPANY. EACH DEPARTMENT

FUNCTIONS ,

IS

GUIDED

BY

OF THE

MANUALS ,

AND

ARTICLES

COMPANY,

POLICY

AND

OF

ASSOCIATION

OF

WHILE DISCHARGING ITS

GUIDELINES ,

WHICH

ARE

PERIODICALLY REVIEWED AND UPDATED .

MOST

OF

GROUP AN

OFFICERS OF VARIOUS ORGANIZED CENTRAL SERVICES ARE ON

DEEMED DEPUTATION WITH THE

REGULATIONS OF THE

COMPANY,

WHO ARE GOVERNED BY THE RULES AND

CENTRAL GOVERNMENT . SO

FAR THE ABSORBED EMPLOYEES

ARE CONCERNED , AT PRESENT , EXCEPT FOR THE RULES MADE BY THE

BROADLY , THEY ARE GOVERNED BY THE RULES AND REGULATIONS OF THE

BSNL;

CENTRAL

GOVERNMENT .

1.6.

DOCUMENTS THAT ARE HELD BY THE COMPANY OR UNDER ITS

CONTROL

37

THE COMPANY

MAINTAINS VARIOUS STATUTORY DOCUMENTS , REGISTERS , BOOKS,

LICENSES , MANUALS ,
THE

COMPANY,

AND AGREEMENTS

ETC. FOR THE BUSINESS OPERATION OF

AS REQUIRED UNDER VARIOUS STATUTES , RULES AND REGULATIONS

AS WELL AS FOR THE SMOOTH FUNCTIONING OF THE

COMPANY.

1.7. PARTICULARS OF ARRANGEMENT FOR CONSULTATION WITH THE

MEMBERS OF THE PUBLIC IN RELATION TO THE FORMULATION OF
POLICY OR IMPLEMENTATION THEREOF
BHARAT SANCHAR NIGAM LIMITED IS

COMMERCIAL ORGANIZATION

AND POLICIES

FORMULATED BY IT RELATE TO ITS INTERNAL MANAGEMENT AND THEREFORE , THERE

IS NO REQUIREMENT FOR CONSULTATION WITH THE MEMBERS OF THE
TO FORMULATION OF ITS INTERNAL POLICIES .

COMPANY

HOWEVER,

PUBLIC

PRIOR

INTERNAL POLICIES OF THE

ARE FORMULATED IN COMPLIANCE WITH THE APPLICABLE PROVISIONS OF

THE STATUTES, RULES AND REGULATIONS ETC.

THE

MEMBERS OF THE PUBLIC , WHO ARE DEALING WITH THE

COMPANY

IN ITS

BUSINESS TRANSACTION HAVE ANY COMPLAINTS / GRIEVANCES , THEY CAN APPROACH

THROUGH E- MAIL OR THROUGH THE CONCERNED OFFICERS FOR REDRESSAL AS
HOSTED IN THE WEB- SITE WWW.BSNL .CO .IN.

1.8 STATEMENT ON THE BOARD & SUB COMMITTEES OF THE BOARD

AND OTHER COMMITTEES
THE MANAGEMENT
TERMS OF THE

DIRECTORS

ARTICLES

CAN

DIRECTORS. AT

COMPANY

OF THE

HAVE

OF

IS VESTED WITH THE

ASSOCIATION

MINIMUM

THREE

PRESENT , THERE ARE

SIX

38

OF THE

BOARD

OF

COMPANY,

DIRECTORS . IN

THE

BOARD

OF

DIRECTORS

AND

WHOLE TIME

FUNCTIONAL DIRECTORS

MAXIMUM

FIFTEEN

INCLUDING THE

CHAIRMAN

CUM

MANAGING DIRECTOR,

ONE PART -TIME

GOVERNMENT

NOMINEE DIRECTOR.
THE

MEETINGS OF THE

BOARD

OF

DIRECTORS

NOT ACCESSIBLE FOR PUBLIC .

SIMILARLY

DIRECTORS

OF THE

AND

COMMITTEES

AND

THE

BOARD

COMMITTEES

MINUTES BOOKS

OF THE
OF THE

BOARD

ARE

BOARD

OF

ARE NOT OPEN FOR INSPECTION BY

PUBLIC .

FOR

DETAILS OF THE

SENIOR OFFICER'S
COMPANYS

NAMES , DESIGNATIONS

OF THE

AND

TELEPHONE NUMBERS

PUNJAB TELECOM CIRCLE ,

OF THE

PLEASE REFER TO THE

WEBSITE

BHARAT SANCHAR NIGAM LIMITED

PROGRAMMES FOR PUBLIC .

DOES NOT HAVE ANY DIRECT SUBSIDY SCHEMES

HOWEVER, BSNL

IS OFFERING CONCESSIONAL TARIFF

FOR RURAL SUBSCRIBERS WITH LOWER RENTAL AND HIGHER FREE CALLS AS
COMPARED TO URBAN AREAS .

MONTHLY RENTAL CHARGES

(BASED

ON

THE

FOR

DETAILS OF COMPARATIVE TARIFF IS AS UNDER :

B-FONE

EXCHANGE-SYSTEM CAPACITY)

GENERAL PACKAGE
Exchange Capacity
LESS

THAN

> 1000

OFFERED BY BSNL
RURAL

TRAI
RURAL

RS. 50

RS. 70

< 30000

RS. 110

RS. 120

< 100000

RS. 150

RS. 200

1000

LINES

STANDARD PACKAGE

LINES

LINES

> 30000

LINES
LINES

39

OF

100000

LINES

&

RS. 210

ABOVE

RS. 280

1.9 DIRECTORY OF OFFICERS & WORKMEN

BHARAT SANCHAR NIGAM LIMITED EMPLOYEE
339853. G ROUPS B, C
OF

AND

TELECOMMUNICATIONS

SERVICES

OF

THE

PER THE

TELECOM

LEVEL EMPLOYEES OF THE ERSTWHILE

COMPANY. OFFICERS
ARE ON

20TH AMENDMENT (4

REGULATORY

31.3.2005

IS

DEPARTMENTS

HAVE ALREADY BEEN PERMANENTLY ABSORBED IN THE

SERVICES , THE MOST OF THEM

AS

STRENGTH AS ON

OF

AUTHORITY

OF

VARIOUS

ORGANIZED GROUP A

DEEMED DEPUTATION TO THE

2002)
OF

TO

TTO99

INDIA

(TRAI)

DATED

COMPANY.

14.3.2002,

HAD

THE

RECOMMENDED

RATIONALISATION OF RENTAL FOR RURAL SUBSCRIBERS BASED ON THE EXCHANGE

SYSTEM CAPACITY OF THE ENTIRE

HOWEVER,

SDCA

ON LINES OF URBAN SUBSCRIBERS .

FOR THE BENEFIT OF RURAL SUBSCRIBERS

BSNL

CONTINUES TO CHARGE

TARIFF FROM RURAL SUBSCRIBERS ON THE BASIS OF THE CAPACITY OF EXCHANGE

SYSTEM AS IT EXISTED PRIOR TO

15-8-1998, I.E.

BEFORE THE LOCAL CALL AREA

BECAME CO- TERMINUS WITH THE SHORT DISTANCE CHARGING AREA

(SDCA),

WITH

ALL SUBSEQUENT AUGMENTATIONS TAKEN INTO ACCOUNT .

1.10

ANNER OF EXECUTION OF SUBSIDY PROGRAMMES, INCLUDING THE

AMOUNTS ALLOCATED AND THE DETAILS OF BENEFICIARIES OF SUCH

PROGRAMMES.
BSNL is extending rebate in rentals, registration, installation of phones etc to certain
category of subscribers as detailed here under:

40

1.11

PARTICULARS OF RECIPIENTS OF CONCESSIONS, PERMITS OR

AUTHORISATIONS GRANTED BY THE COMPANY.

Bharat Sanchar Nigam Limited does not grant any concession, permits or
authorization, except for appointing franchises and agents for sale of its services like
PCO holders, franchises for BSNL services etc.

Category of person
Senior citizens of the age of 65
years and above

REBATE/CONCESSION
I)

REGISTRATION

OF ONE TELEPHONE UNDER

NON-

OYT SPECIAL
CATEGORY

WHICH IS PRIORITY CATEGORY .

II)

Visually blind persons

NO REGISTRATION CHARGES.
I) REGISTRATION OF ONE TELEPHONE

UNDER

NON-

OYT SPECIAL
CATEGORY.
II)

50%

REBATE IN NORMAL RENTAL CHARGES

III)

Freedom fighters/ widows of

50% REBATE IN ANNUAL ADVANCE RENTALS

I) REGISTRATION OF ONE TELEPHONE UNDER NON-

freedom fighters getting

OYT-SWS

pension under freedom fighter

pension scheme

II)
III)

NO
NO

CATEGORY

REGISTRATION CHARGES .
INSTALLATION CHARGES .

IV)

Gallantry Award winners

50% REBATE IN NORMAL RENTAL CHARGES

I) REGISTRATION OF ONE TELEPHONE UNDER NON-

(Defense services) under

OYT SPECIAL

following categoriesParam Vir Chakra

II)

NO

CATEGORY

REGISTRATION CHARGES .

III)

NO

INSTALLATION CHARGES .

IV)

NO

RENTAL CHARGES

Ashok Chakra
Kirti Chakra
Vir chakra

41

Shaurya Chakra
I) REGISTRATION

War widows/Disabled soldiers

NON-

OF ONE TELEPHONE UNDER

OYT SPECIAL
CATEGORY.
II)
III)

NO

REGISTRATION CHARGES .

50%

REBATE IN NORMAL RENTAL CHARGES

IV)

NO INSTALLATION CHARGES
I) REGISTRATION UNDER NON-OYT S PECIAL

Awardees of Presidents Police

CATEGORY

medal for gallantry and widows

II)

of awardees conferred such

award posthumously.

NO

REGISTRATION CHARGES .

III)

NO

INSTALLATION CHARGES .

IV)

NO

RENTAL CHARGES

1.12 DETAILS OF INFORMATION AVAILABLE OR HELD IN ELECTRONIC

FORM
THE

INFORMATION RELATING TO

COMPANY PROFILE / BUSINESS, PRODUCTS ,

SERVICES, FINANCIAL PERFORMANCE , SHAREHOLDING PATTERN

ETC. IS AVAILABLE IN

ELECTRONIC FORM , WHICH CAN BE OBTAINED FROM THE WEBSITE OF THE

FROM CHAPTERS
WWW.BSNL .CO .IN

IN THIS MANUAL AND ALSO FROM ITS PUBLIC

COMPANY

PORTAL

1.15 PARTICULARS OF FACILITIES AVAILABLE TO CITIZENS FOR

OBTAINING INFORMATION.
BSNL

IS MAINTAINING A CORPORATE WEBSITE WITH NAME WWW.BSNL .CO.IN

DESIROUS OF OBTAINING INFORMATION MAY VISIT THE WEBSITE .

CITIZENS

MOST

OF THE

INFORMATION OF THE PUBLIC CONSUMPTION IS HOSTED PARTICULARLY VARIOUS

SERVICES TARIFF PLANS

&

LINKS TO ITS SUBORDINATE UNITS WEBSITES .

INFORMATION OFFICERS I.E.

HAD FROM SECTION
UNITS

WEBSITES

UNDER THE

BSNL UNITS

RIGHT

TO INFORMATION

ACT

THE

LIST OF

CAN ALSO BE

WEBSITE FROM WWW.BSNL .CO.IN WEBSITE .(

ARE LINKED TO MAIN CORPORATE OFFICE WEB SITE ).

42

BSNL

1.16 NAMES, DESIGNATION AND OTHER PARTICULARS OF CENTRAL

PUBLIC INFORMATION OFFFICERS.
IN

TERMS OF

COMPANY
& PIOS)

SECTION 5 (1)

OF THE

TO

INFORMATION ACT, 2005,

HAS DESIGNATED VARIOUS OFFICIALS AS I NFORMATION

AND

APPELLATE

AUTHORITIES .

PUNJAB

THE

RIGHT

THE

OFFICERS (APIOS

LIST OF SUCH OFFICERS IS AVAILABLE AT

TELECOM

CIRCLE

WWW.PUNJAB .BSNL .CO .IN/ROIPUNJAB .HTM THE CONCERN DESIGNATED

WEBSITE
APIO S, PIO,S

CAN BE APPROACHED FOR GETTING THE INFORMATION AS PURSUANT TO THE

ACT 2005

1.

AT VARIOUS PLACES

BSNL: A F INANCIAL OVERVIEW

2.1:-FINANCIAL ANALYSIS

OF

2.2:-INCOME , EXPENDITURE

BSNL

AND

PROFIT :

2.3:-ACCOUNTING POLICIES

FINANCE

PROFILE

43

THE

RTI

BHARAT SANCHAR NIGAM LIMITED ,

UNDERTAKING

OF THE

NATION ,

PUBLIC SECTOR

THE LARGEST

IS CERTAINLY ON A FINANCIAL GROUND THAT 'S

SOUND .

THE COMPANY

HAS A NET WORTH OF

AUTHORIZED EQUITY CAPITAL OF

UP

EQUITY SHARE CAPITAL

REVENUES

IS

RS. 38053

(Note: 1 US $ = 40.02 INR

2.1

OF

RS. 10,000

RS. 5,000

CRORES

AS ON

RS. 88,128

CRORES

CRORES

(US $ 9.51

(US$ 22.02

CRORES

(US $ 2.50

(US $ 1.25

BILLION ) IN

BILLION ),

BILLION ),

PAID

BILLION ) AND

2008-09.

31-03-2010)

Financial Analysis of BSNL:-

ON OCTOBER 1ST, 2000, BSNL

FUNCTIONS OF ERSTWHILE

TELECOMS . SINCE

THEN

OPERATING COMPANY

DOT

BSNL

IN THE

WAS FORMED BY CONVERTING SERVICE PROVIDING

TO PROVIDE LEVEL PLAYING FIELD TO PRIVATE

HAS EMERGED AS THE

WORLD . BSNL

7TH

LARGEST

TELECOM

HAS PLAYED MAJOR ROLE IN

SPREADING TELEPHONES TO RURAL AREAS OF THE COUNTRY AT AFFORDABLE RATES.

44

AS

PER

TRAI

REPORT

5.3

LAKH VILLAGES HAVE BEEN PROVIDED ACCESS TO

TELECOM NETWORK THROUGH

VPTS

VPTS

HAVE BEEN PROVIDED BY

2005)

RURAL

DEL S

BSNL. BSNL

IN THE COUNTRY .

IMPORTANT ROLE PLAYED BY

2.2

COVERING

BSNL

BY

87%

OF THE VILLAGES .

HAS PROVIDED

13.59

MOST

MILLION

OF THE

(JULY

THIS STATEMENT WE CAN JUDGE THE

RIGHT FROM ITS INCEPTION.

Income, Expenditure and Profit:

FOLLOWING TABLE
FOR THE

SHOWS INCOME ,

EXPENDITURE

AND

PROFIT

FIGURES OF

BSNL

YEAR PERIOD SINCE ITS INCEPTION.

TABLE
S.

YEAR

NO.
1

1.10.2005

INCOME

EXPENDITURE PROFIT

PROFIT

(Rs. in Crores)

(Rs. in Crores)

BEFORE TAX

AFTER TAX

11699

10669

(Rs. In Crores) (Rs. In Crores)

1030
747

24681
25892
33918
36090

20461
25078
27163
29401

4220
8136
6755
6689

TO

2
3
4
5

31.3.2006
2007
2008
2009
2010

6312
1444
5976
10183

Government has set ambitious targets for Telecom PSUs (MTNL and BSNL) for
providing a total of 12.50 CRORE
TARGETED MARKET SHARE OF

PSUS, WHICH

DECLINED TO LESS THAN

REVENUE FROM
STANDS AT

WLL
PCO

37%

9,447,357

10.5%

SERVICES .

50%. HOWEVER

WAS MORE THAN

85 %

GOT

BSNL

FORMATION , HAS

AS ON DATE. I N THE FINANCIAL YEAR

CELLULAR SUBSCRIBERS

44.68 %

BUSINESS GAVE ANOTHER

LESS

INCOME FROM

17.34 %

45

WITH A

OVERALL MARKET SHARE OF BOTH

AT THE TIME OF

OF THE TOTAL REVENUE .

WE

DECEMBER 2012

TELEPHONES BY

(AS

THAN

ON

1%

THE

MARCH 31, 2010)

REVENUE CAME FROM

BASIC TELEPHONE

OF THE INCOME .

2009-10,

SERVICES WHILE

REVENUE

FROM BASIC

SERVICES DURING

CRORE,
FROM

2001-05

RS 23,080 CRORE, RS 21,545 CRORE, RS 23,954

WAS

RS 22,385 CRORE. IN

AND

35,859,482

2009-10,

THE FINANCIAL YEAR

BASIC SUBSCRIBERS

(AS

MARCH 31, 2010)

ON

THE REVENUE

IS

62%

OF THE

TOTAL REVENUE .

IN

THE LAST

YRS ,

MAINTENANCE OF

BSNL

HAS RECEIVED

VPT, ADC,

PROFIT BEFORE TAX

OF

AND

RS 15,701 CRORE

IUC,

WHICH IS

RS 18,477 CRORE

85%

AS COMPENSATION FOR

BSNLS

OF

CUMULATIVE

DURING THE SAME PERIOD .

RECEIVED

100%

2008-09,

THE REIMBURSEMENT OF LICENSE FEE IS RESTRICTED TO

REIMBURSEMENT OF LICENSE FEE FROM

2006-07

TO

1/3RD

THEREAFTER ,

RECEIVED TOTAL LICENSE FEE REFUND OF

CRORE

IN

THE LAST

YRS

RS 8,665 CRORE (BSNL

HAS

2007-08. F OR

LICENSE FEE PAID WHICH WILL BE FURTHER RESTRICTED TO

REIMBURSEMENT WILL BE NIL .

BSNL
2/3 RD

IN

2009-10.

BSNL

PAID

OF

HAS

RS 15,498

AS LICENSE FEES) AS A COMPENSATION FOR PROVIDING TELECOM SERVICES

IN RURAL AREAS .

THE

BSNL

TOTAL INCOME OF

CRORE

AND

PROFIT BEFORE TAX (PBT)

EQUAL TO ITS

70%

FOR THE FINANCIAL YEAR

IUC

IS

RS 6,688 CRORE

RS 6,035 CRORE. BSNL

OF

OF ITS PROFITS AND ONLY

30%

SUCH EXEMPTION FROM THIS YEAR ,

2004-05

IS

RS 36,090

WHICH IS ALMOST

WILL HAVE TO PAY INCOME TAX ON

WOULD BE EXEMPTED . I N THE ABSENCE OF

BSNL

WILL HAVE TO RESORT TO BORROWING

RESULTING IN SUBSTANTIAL INTEREST BURDEN .

BSNLS
FROM

EXPENSES ON STAFF HAVE SHOT-UP BY

RS 3,848 CRORE

FINANCIAL YEAR
EXPENSES .

IN

2004-05,

SIMILARLY ,

THE

2001-02

ADMINISTRATION

199%

2004-05. F OR

THE FINANCIAL YEAR

OPERATION

ARE

EXPENSES ARE

27.05%

55.68%

AND

RS 3,995 CRORE

OF

THE

IN THE LAST FOUR YEARS

RS 8,418 CRORE

EXPENSES ON STAFF ARE

INCREASED BY

FROM

TO

218.75%

2004-05,
TOTAL

IN

28.63%

OPERATIONAL
2001-02

TO

EXPENSES ON
EXPENSES .

OF THE TOTAL EXPENSES IN

46

2004-05. F OR

IN

OF THE TOTAL

COSTS HAVE ALSO

RS 7,951 CRORE

ADMINISTRATION

TOGETHER

2004-05.

THE

THESE

IN

AND
TWO

BSNL

AS A BUSINESS ENTITY HAS PERFORMED WELL SO FAR EVEN THOUGH THERE

ARE SOME DISTURBING TRENDS ALSO LIKE BIG INCREASE ON STAFF COST AND
ADMINISTRATIVE EXPENDITURE .
BARRING ONLY TO

OF

AGR

BSNLS STAFF

MTNL. WHILE

SAME FIGURE FOR

COST IS HIGHEST AMONG INDUSTRY

INDUSTRY AVERAGE OF STAFF COST IS ABOUT

BSNL

25 %. DESPITE

IS MORE THAN

4-6

ALL

CONSTRAINS OF THE LEGACY NETWORK AND LARGE STAFF OVERALL PERFORMANCE

OF

BSNL

IS SATISFACTORY .

BSNL

DOES NOT HAVE SUBSTANTIAL DEBT SO OUT GO

ON THE PART OF INTEREST PAYMENT IS SMALL .

BUSINESS IS AVERAGE .

BSNL

REQUIRED .

BROADBAND

MARKETING

PERFORMANCE IN

STARTED GETTING MORE THAN

FROM THIS SEGMENT AT THE END OF YEAR

THIS FRONT .

BSNLS

2005. MORE

10 %

MOBILE

OF ITS REVENUE

EFFORTS ARE REQUIRED ON

IS OTHER PROMISING AREA WHERE LOT OF EFFORTS IS

OF SERVICES IS NOT UP TO THE MARK AND SOME SERIOUS

STEPS NEEDS TO BE TAKEN IN THIS AREA BECAUSE CUSTOMER ACQUISITION AND

RETENTION IS OF PRIME IMPORTANCE IN THE HIGHLY VOLATILE TELECOM MARKET
PLACE WHERE HIGH CHURNING AND LOW CUSTOMER LOYALTY ARE THE
CHARACTERISTICS .

DESPITE

ALL THIS GROWTH IN THE

DIGITAL DIVIDE IS CONTINUOUSLY INCREASING .

AND RURAL TELE -DENSITY IS WIDENING .

GAP

PRIVATE

TELECOM

SECTOR THE

BETWEEN URBAN TELE -DENSITY

PLAYERS ARE LESS INTERESTED IN

HIGH INVESTMENT ORIENTED AND LOW RETURN PAYING RURAL INDIA BUT FOR
THERE IS A BIG OPPORTUNITY HERE BECAUSE
NETWORK OF MORE THAN
BACKBONE .

BSNL

BSNL

BSNL

ALREADY HAS A LARGE

36000 DIGITAL EXCHANGES

CONNECTED BY

OFC

CAN HARP ON ITS EXISTING INFRASTRUCTURE TO POSITION ITSELF

AS FORMIDABLE PLAYER .

2.3 ACCOUNTING POLICIES

(SCHEDULE T)

47

2.3 .1 BASIS OF PREPARATION OF FINANCIAL STATEMENTS

THE
OR

FINANCIAL STATEMENTS OF

BSNL)

BHARAT SANCHAR NIGAM LIMITED (THE C OMPANY

ARE

PREPARED UNDER THE HISTORICAL COST CONVENTION ADOPTING THE ACCRUAL

METHOD OF ACCOUNTING IN
ACCORDANCE WITH INDIAN

GENERALLY ACCEPTED ACCOUNTING PRINCIPLES

AND IN

ACCORDANCE WITH THE

PROVISIONS OF THE

COMPANIES ACT, 1956 ( THE ACT).

2.3 .2 REVENUE RECOGNITION

INCOME
WITH
A)

FROM SERVICES IS ACCOUNTED FOR ON ACCRUAL BASIS AND IN CONFORMITY

ACCOUNTING STANDARD 9

\ REVENUE

OF

ICAI. ACCORDINGLY ,

FOR ALL SERVICES IS RECOGNIZED WHEN EARNED AND ARE

REALIZABLE AT THE TIME OF BILLING .

UNBILLED

REVENUES FROM THE BILLING DATE

TO THE END OF THE YEAR ARE RECORDED AS ACCRUED REVENUE DURING THE
PERIOD IN WHICH THE SERVICES ARE PROVIDED .

PROVISION

IS MADE IN RESPECT OF

BILLS CONSIDERED TO BE DISPUTED ( BY THE MANAGEMENT ), DEBTS OUTSTANDING

FOR MORE THAN TWO YEARS AND FOR DEBTS DUE FOR LESS THAN
EXTENT CONSIDERED NECESSARY BY THE MANAGEMENT .

48

YEARS , TO THE

B)

INSTALLATION CHARGES

RECOVERED FROM SUBSCRIBERS AT THE TIME OF NEW

TELEPHONE CONNECTIONS ARE RECOGNIZED AS INCOME IN THE FIRST YEAR OF THE

BILLING .

C)

IN

TERMS OF THE ARRANGEMENT BETWEEN

TELECOMMUNICATIONS (DOT)

AND THE

DEPARTMENT

COMPANY,

OF

THE CHARGES FOR

TELECOMMUNICATION SERVICES AND OTHER INFRASTRUCTURAL SERVICES PROVIDED

BY

BSNL

D)

TO

DOT

ARE NEITHER BEING BILLED NOR PROVIDED FOR .

ALE PROCEEDS OF SCRAP ARISING FROM MAINTENANCE AND PROJECT WORKS

ARE TAKEN INTO MISCELLANEOUS INCOME IN THE YEAR OF SALE .

E)

INCOME

AND

FROM

PREPAID

SIMS,

RECHARGE COUPONS OF

MOBILE, PREPAID CALLING CARDS,

INTERNET CONNECTION CARDS ARE TREATED AS INCOME OF THE YEAR

IN WHICH THE PAYMENT IS RECEIVED SINCE THE EXTENT OF USE OF THESE CARDS
WITHIN THE FINANCIAL YEAR COULD NOT BE ASCERTAINED .

49

F)

WHEREVER

THERE IS UNCERTAINTY IN REALIZATION OF INCOME , SUCH AS

LIQUIDATED DAMAGES , CLAIMS ON

GOVERNMENT DEPARTMENTS &

LOCAL

AUTHORITIES ETC., THESE ARE RECOGNIZED ON COLLECTION BASIS.

G)

THE

CLAIMS ON ACCOUNT OF REIMBURSEMENT FOR PROVISION OF

INFRASTRUCTURE , OPERATION AND

MAINTENANCE OF

VILLAGE PUBLIC TELEPHONES (VPTS)

CONNECTIONS (RDEL S)

RECEIVABLE FROM

U.S.O.

AND

RURAL HOUSEHOLD

FUND ARE ACCOUNTED FOR AS

REVENUE ON ACCOUNT OF THE FACT THAT THE CLAIM FOR INFRASTRUCTURE CANNOT
BE CREDITED TO THE CONCERNED ASSET ACCOUNT SINCE THE CLAIM AMOUNT COULD
NOT BE SEGREGATED ASSET WISE.

H)

OTHER

INCOME BY WAY OF INTEREST ON LOANS TO EMPLOYEES , SECURITY

DEPOSIT WITH

DEPARTMENTS

GOVERNMENT
AND LOCAL AUTHORITIES , BEING NOT MATERIAL , ARE ACCOUNTED FOR

ON COLLECTION .

2.3 .3 FIXED ASSETS

50

3.1 :_F IXED

ASSETS ARE CARRIED AT COST LESS DEPRECIATION .

COST

INCLUDES

DIRECTLY RELATED ESTABLISHMENT AND OTHER EXPENSES INCLUDING EMPLOYEE

REMUNERATION AND BENEFITS, DIRECTLY IDENTIFIABLE TO THE
CONSTRUCTION

CREATION OF THE ASSETS.

OR

3.2 :-E XPENDITURE

ON REPLACEMENT OF ASSETS , EQUIPMENTS , INSTRUMENTS AND

REHABILITATION WORKS IS CAPITALIZED IF, IN THE OPINION OF THE MANAGEMENT , IT

RESULTS IN ENHANCEMENT OF REVENUE GENERATING CAPACITY.

3.3 :-A SSETS

ARE CAPITALIZED TO THE EXTENT COMPLETION CERTIFICATES HAVE

BEEN OBTAINED , WHEREVER APPLICABLE .

3.4 :-T HE

COST OF STORES AND MATERIALS AT THE TIME OF ISSUE TO A

IS DEBITED TO

PROJECT

CWIP.

3.5 :-A PPARATUS

AND PLANTS PRINCIPALLY CONSISTING OF TELEPHONE

EXCHANGES , TRANSMISSION EQUIPMENTS AND AIR CONDITIONING PLANTS ETC. ARE

CAPITALIZED AS AND WHEN AN EXCHANGE IS COMMISSIONED AND PUT TO USE .

3.6

:-CABLES

ARE CAPITALIZED AS AND WHEN READY FOR CONNECTION TO THE

MAIN SYSTEM .

3.7: - INTANGIBLE

ASSETS ARE STATED AT COST OF ACQUIRING THE SAME LESS

ACCUMULATED DEPRECIATION

AMORTIZATION

2.3 .4 DEPRECIATION/AMORTIZATION

51

DEPRECIATION

IS PROVIDED BASED ON THE

WRITTEN DOWN VALUE

METHOD AT THE

RATES PRESCRIBED IN

SCHEDULE XIV

TO THE

COMPANIES ACT, 1956

EXCEPT FOR

SUBSCRIBER

INSTALLATION. THE SUBSCRIBER

INSTALLATION

IS DEPRECIATED OVER THE USEFUL LIFE OF

DOWN VALUE

METHOD .

ASSETS COSTING UP - TO RS. 5,000

PURCHASE .

SIMILARLY ,

YEARS ON

WRITTEN

ARE DEPRECIATED FULLY IN THE YEAR OF

PARTITION WORKS COSTING UP TO

RS. 2, 00,000

ARE

DEPRECIATED FULLY IN THE YEAR OF CONSTRUCTION .

THE

DEPRECIATION ON MACHINERY

&

TOOLS USED BOTH FOR PROJECT AND

MAINTENANCE WORK IS CHARGED TO PROFIT AND LOSS ACCOUNT INSTEAD OF

CAPITALIZATION .

ALL

TELEPHONE EXCHANGE BUILDINGS , ADMINISTRATIVE OFFICES

AND CAPTIVE CONSUMPTION ASSEMBLING PREMISES /WORKSHOPS ARE CONSIDERED

AS NORMAL BUILDING AND NOT AS FACTORY BUILDING .

ACCORDINGLY

IS CHARGED UNIFORMLY . I NTANGIBLE ASSETS SUCH AS

ENTRY LICENSE FEE

TELECOM SERVICE

DEPRECIATION
FOR

OPERATIONS ARE AMORTIZED OVER THE LICENSE PERIOD ( I.E.

YEARS ) AND STANDALONE COMPUTER SOFTWARE APPLICATIONS ARE AMORTIZED

OVER THE LICENSE PERIOD SUBJECT TO MAXIMUM OF

10

YEARS AS PER STRAIGHT

LINE METHOD .

2.3

.5 IMPAIRMENT OF ASSETS

ASSETS,

WHICH ARE IMPAIRED BY DISUSE OR OBSOLESCENCE , ARE SEGREGATED

FROM THE CONCERNED ASSETS CATEGORY AND SHOWN AS

ASSETS

DECOMMISSIONED

AND PROVISION MADE FOR THE LOSS , IF ANY , DUE TO THE DIFFERENCE

BETWEEN THEIR NET CARRYING COST AND THE NET REALIZABLE VALUE .

2.3

.6 INVESTMENTS

LONG-TERM

INVESTMENTS ARE CARRIED AT COST , AFTER PROVIDING FOR ANY

DIMINUTION IN VALUE , IF SUCH DIMINUTION IS OF A PERMANENT NATURE .

52

20

2.3 .7

INVENTORIES

INVENTORIES

ARE VALUED AT COST OR NET REALIZABLE VALUE AS THE CASE MAY BE

COST ASCERTAINED GENERALLY ON WEIGHTED AVERAGE METHOD ; OBSOLETE/NON

MOVING INVENTORIES ARE VALUED AT NET REALIZABLE VALUE .

2.3

.8 FOREIGN CURRENCY TRANSACTIONS

(I) TRANSACTIONS

IN FOREIGN CURRENCY ARE RECORDED AT THE EXCHANGE RATE

PREVAILING ON THE DATE OF THE TRANSACTION I.E . ON THE DATE OF PAYMENT OR

RECEIPT AS THE CASE MAY BE.

(II) ALL FOREIGN CURRENCY LIABILITIES

THE EXCHANGE RATE

PREVAILING AS

DIFFERENCE TAKEN TO

LOSS

OR

2.3

.9

PROFIT

AND

AND MONETARY ASSETS ARE STATED AT

AT THE DATE OF

LOSS ACCOUNTS

AS

BALANCE SHEET

AND THE

EXCHANGE FLUCTUATION

GAIN.
EXTRAORDINARY ITEMS

EXTRA-ORDINARY

ITEMS OF INCOME AND EXPENDITURE , AS COVERED BY

AS 5,

ARE

DISCLOSED SEPARATELY .

2.3

.10 EMPLOYEES BENEFITS

2.3

10.1 SHORT TERM EMPLOYEE BENEFITS:

SHORT TERM

EMPLOYEE BENEFITS ARE RECOGNIZED IN THE PERIOD DURING WHICH

THE SERVICES HAVE BEEN RENDERED .

2.3

10.2 LONG TERM EMPLOYEE BENEFITS:

2.3

10.2.1 DEFINED CONTRIBUTION PLAN:

53

A)

PENSION CONTRIBUTION (INCLUDING

THE

EMPLOYEES OF

DOT

GRATUITY )

WHO HAVE OPTED FOR ABSORPTION

COMPANY , AND THE EMPLOYEES ON DEEMED DEPUTATION FROM

ABSORBED IN THE

GOVERNMENT

ELIGIBLE FOR PENSION , WHICH IS A DEFINED CONTRIBUTION PLAN .

THE

ARE

COMPANY

MAKES MONTHLY CONTRIBUTION ( INCLUDING LIABILITY ON ACCOUNT OF GRATUITY) AT

THE APPLICABLE RATES AS PER
TO THE
B)

GOVERNMENT

GOVERNMENT PENSION RULES, 1972

AND

FR & SR

WHO ADMINISTERS THE SAME .

EMPLOYEES PROVIDENT FUND

ALL

DIRECTLY RECRUITED EMPLOYEES OF THE COMPANY ARE ENTITLED TO RECEIVE

BENEFITS UNDER THE

PROVIDENT FUND . BOTH

PREDETERMINED RATE OF EMPLOYEE S

MONTHLY CONTRIBUTION TO THE PLAN AT A

BASIC SALARY AND DEARNESS ALLOWANCE.
FUND ARE ADMINISTERED BY THE

EMPLOYEES AND EMPLOYER MAKE

THESE

PROVIDENT

PROVIDENT FUND COMMISSIONER . CONTRIBUTIONS

TO

PROVIDENT FUND

ARE EXPENSED IN THE

C)

CONTRIBUTION

LEAVE SALARY

FOR

EMPLOYEES ON DEEMED DEPUTATION FROM

FOR

CONTRIBUTIONS TO

PROFIT

AND

LOSS ACCOUNT .

GOVERNMENT , LEAVE

SALARY

CONTRIBUTION IS PROVIDED AND SUCH LEAVE SALARY CONTRIBUTION TAKES CARE OF

LEAVE ENCASHMENT ALSO.

2.3

10.2.2 DEFINED BENEFIT PLANS:

A)

L EAVE ENCASHMENT :

THE

LIABILITY ON ACCOUNT OF UNVEILED LEAVE IN RESPECT OF ABSORBED

EMPLOYEES AND DIRECTLY RECRUITED EMPLOYEES AT THE YEAR END IS FULLY

PROVIDED FOR ON ESTIMATED BASIS .

B)
THE

G RATUITY
COMPANY PROVIDES FOR GRATUITY, A DEFINED BENEFIT PLAN ( THE

PLAN)

GRATUITY

COVERING ALL DIRECTLY RECRUITED ELIGIBLE EMPLOYEES . I N ACCORDANCE

WITH THE PAYMENT OF

GRATUITY ACT, 1972,

54

THE

GRATUITY PLAN

PROVIDES A LUMP

SUM PAYMENT TO VESTED EMPLOYEES ON RETIREMENT , DEATHS , INCAPACITATION OR

TERMINATION OF EMPLOYMENT .

LIABILITIES

WITH REGARDS TO THE

GRATUITY PLAN

ARE DETERMINED BY ACTUARIAL VALUATION ON BALANCE SHEET DATE AND ARE

EXPENSED IN THE PROFIT AND LOSS ACCOUNT

C)

O THER

MEDICAL

BENEFITS INCLUDING POST EMPLOYMENT MEDICAL CARE

REIMBURSEMENTS AND OTHER PERSONAL CLAIM BILLS OF EXISTING

RETIRED EMPLOYEES ARE ACCOUNTED FOR ON ACTUAL BASIS IN RESPECT OF BILLS

RECEIVED TILL THE CUT OFF PERIOD IN THE ACCOUNTS AT

THE

CONCERNED PRIMARY

UNITS AS PER THE PRESCRIBED LIMITS .

2.3

11.

EXPENSES

MANUFACTURING EXPENSES
INCURRED AT

FACTORY

UNITS ARE ALLOCATED TO THE COST OF THE

MANUFACTURED PRODUCTS .

2.3

12. PRIOR PERIOD ITEMS

ITEMS

OF INCOME /EXPENDITURE EXCEEDING

RS. 5

LAKH ARE ONLY CONSIDERED FOR

BEING TREATED AS 'PRIOR PERIOD ITEMS '.

2.3

13. TAXES ON INCOME

TAXES

ON INCOME FOR THE CURRENT PERIOD ARE DETERMINED ON THE BASIS OF

TAXABLE INCOME AND TAX CREDITS COMPUTED IN ACCORDANCE WITH THE

PROVISIONS OF THE INCOME

IN

ACCORDANCE WITH THE

TAX ACT, 1961.

AS-22, DEFERRED TAX LIABILITY

TIMING DIFFERENCES

55

IS RECOGNIZED ON THE

BETWEEN ACCOUNTING INCOME AND THE TAXABLE INCOME FOR THE PERIOD TAKING
INTO CONSIDERATION THE CONTENTS OF

ACCOUNTING STANDARD INTERPRETATIONS

AND QUANTIFIED USING THE TAX RATES IN FORCE OR SUBSTANTIVELY ENACTED AS

ON THE

BALANCE SHEET

DEFERRED TAX ASSETS

DATE .
ARE RECOGNIZED AND CARRIED FORWARD TO THE EXTENT

THERE IS A VIRTUAL CERTAINTY THAT SUCH DEFERRED TAX ASSETS CAN BE REALIZED .

2.3

14. PROVISIONS

PROVISIONS

ARE RECOGNIZED WHEN THE

COMPANY

HAS A PRESENT OBLIGATION AS

A RESULT OF PAST EVENTS ; IT IS MORE LIKELY THAN NOT THAT AN OUTFLOW OF

RESOURCES WILL BE REQUIRED TO SETTLE THE OBLIGATION ; AND THE AMOUNT HAS
BEEN RELIABLY ESTIMATED .

2.3

15. CONTINGENT LIABILITIES

LIABILITIES ,

THOUGH CONTINGENT , ARE PROVIDED FOR IF THERE ARE REASONABLE

CHANCES OF MATURING SUCH LIABILITIES AS PER MANAGEMENT .

OTHER

CONTINGENT

LIABILITIES , BARRING FRIVOLOUS CLAIMS , NOT ACKNOWLEDGED AS DEBTS, ARE

DISCLOSED BY WAY OF NOTES.

2.3

16. EARNING PER SHARE

EARNINGS PER SHARE (EPS) COMPRISE THE N ET PROFIT

(EXCLUDING

EXTRAORDINARY INCOME NET OF TAX).

COMPUTING

BASIC & DILUTED EPS

THE

AFTER TAX

NUMBER OF SHARES USED IN

IS THE WEIGHTED AVERAGE NUMBER OF SHARES

OUTSTANDING DURING THE YEAR .

2.3

17. SEGMENT REPORTING

THE

PRIMARY SEGMENT CONSISTS OF BASIC AND CELLULAR SERVICES PROVIDED .

THE

MANUFACTURING

ACTIVITIES HAVE NOT BEEN TREATED AS A SEPARATE SEGMENT SINCE SUCH

ACTIVITIES ARE ESSENTIALLY CARRIED ON AS SUPPORT SERVICE TO OTHER
SEGMENTS .

THE

FOLLOWING SPECIFIC ACCOUNTING POLICIES HAVE BEEN FOLLOWED

56

FOR SEGMENT REPORTING :

SEGMENT REVENUE

INCLUDES SERVICE INCOME AND

OTHER INCOME DIRECTLY IDENTIFIABLE WITH/ALLOCABLE TO THE SEGMENT .

INCOME /EXPENSE,

WHICH RELATES TO THE

COMPANY,

AS A WHOLE AND NOT

ALLOCABLE TO INDIVIDUAL BUSINESS

SEGMENT IS INCLUDED IN

UN-ALLOCABLE CORPORATE INCOME /EXPENSE

RESPECTIVELY .

EXPENSES

THAT ARE DIRECTLY IDENTIFIABLE WITH/ALLOCABLE TO SEGMENTS ARE

CONSIDERED FOR DETERMINING

SEGMENT RESULTS. SEGMENT ASSETS

AND

LIABILITIES

INCLUDE THOSE DIRECTLY IDENTIFIABLE WITH THE RESPECTIVE

SEGMENTS .

UNALLOWABLE

CORPORATE ASSETS AND LIABILITIES REPRESENT THE

ASSETS AND LIABILITIES THAT RELATE TO THE

ALLOCABLE TO ANY SEGMENT .

. TELECOM S ECTOR PROFILE

.1.

4.2.

BACKGROUND

ADMINISTRATION

4.4.

ENTRY

4.5.

REGULATORY

OF

AND

CONTROL

PRIVATE SECTOR

CONTROL

57

COMPANY

AS A WHOLE AND NOT

4.6.

TELECOM POLICIES

4.7.

CORPORATIZATION

4.8.

OTHER GOVERNMENT

4.9.

DISINVESTMENT

4.10 .F INANCIAL

OF

ORGANIZATIONS UNDER

TELECOM SECTOR

PSUS

PERFORMANCE

4.11.

FOREIGN DIRECT INVESTMENT

4.12.

EMPLOYMENT

4.13.

CONTRIBUTION

4.14.

WIRELESS

GENERATION

OF THE PRIVATE AND PUBLIC SECTORS IN TELECOM NETWORK

IN LOCAL LOOP (MOBILE ) SERVICE VS .

TELEPHONE SERVICE

58

CELLULAR

MOBILE

4.15.

4.1.

THE

PICTURE AHEAD

BACKGROUND

TELEPHONE

SERVICES HAVE BEEN RECOGNIZED THE WORLD OVER AS AN IMPORTANT

TOOL FOR SOCIO -ECONOMIC DEVELOPMENT FOR A NATION AND HENCE TELECOM
INFRASTRUCTURE IS REGARDED AS A CRUCIAL FACTOR IN ACHIEVING THE SOCIO ECONOMIC OBJECTIVES IN INDIA . I NDIAN

TELECOM

IS MORE THAN

160

YEARS OLD

BEGINNING WITH COMMISSIONING OF THE FIRST TELEGRAPH LINE BETWEEN

AND

DIAMOND HARBOUR

1839. IN 1948 INDIA

IN

HAD ONLY

CONNECTIONS WITH A TELEPHONE DENSITY OF ABOUT

HUNDRED

POPULATIONS. S INCE

AUGUST 2003

THERE WERE

45.6

0.1

KOLKATA

MILLION TELEPHONE

0.02 TELEPHONES

PER

THEN INDIA HAS COME A LONG WAY AND BY

31

MILLION TELEPHONE CONNECTIONS IN THE

5.72

COUNTRY WITH A TELEPHONE DENSITY OF

TELEPHONES PER HUNDRED

POPULATION .

VARIOUS

ADMINISTRATIVE AND FUNCTIONAL ASPECTS OF THE TELECOM SECTOR IN

THE COUNTRY ARE DISCUSSED BELOW :

4.2.

ADMINISTRATION

AND

CONTROL

THE TELECOM COMMISSION,

SET UP IN

APRIL 1989

HAS THE ADMINISTRATIVE AND

FINANCIAL POWERS OF THE

GOVERNMENT

OF TELECOMMUNICATIONS .

THE TELECOM COMMISSION

TELECOMMUNICATIONS (DOT)

OF INDIA TO DEAL WITH VARIOUS ASPECTS

AND THE

DEPARTMENT

OF

ARE RESPONSIBLE FOR POLICY FORMULATION ,

LICENSING , WIRELESS SPECTRUM MANAGEMENT , ADMINISTRATIVE MONITORING OF

PUBLIC SECTOR UNDERTAKINGS (PSU S)

ENGAGED IN TELECOMMUNICATION

SERVICES , RESEARCH AND DEVELOPMENT AND STANDARDIZATION /VALIDATION OF

EQUIPMENT , ETC.

59

4.3.

TELECOM REFORMS

TELECOM
UNDER

SERVICES AND MOST OF THE MANUFACTURING ACTIVITIES WERE TOTALLY

GOVERNMENT

DOMAIN TILL

TELECOM REFORMS

BEGAN IN

1980 S

WITH THE

MISSION BETTER COMMUNICATION PROGRAMME . PRIVATE

LAUNCH OF A

MANUFACTURING OF EQUIPMENT FOR CUSTOMERS ' USE WAS ALLOWED IN

THE

CENTRE

FOR

DEVELOPMENT

OF

TELEMETRIC (C-DOT)

THE DEVELOPMENT OF INDIGENOUS TECHNOLOGIES .

ENTITIES WERE SPUN OFF FROM

LIMITED (MTNL)

IN

DOT

FEBRUARY 1986

NIGAM LIMITED (VSNL)

IN

NAMELY ,
FOR

MARCH 1986

1984

AND

WAS ESTABLISHED FOR

TWO LARGE

CORPORATE

MAHANAGAR TELEPHONE NIGAM

DELHI

AND

MUMBAI

AND

VIDESH SANCHAR

FOR ALL INTERNATIONAL SERVICES .

THIS

BEGAN THE PROCESS OF CORPORATIZATION OF SERVICES THAT HAD HITHERTO BEEN

UNDER A

4.4.
A

GOVERNMENT

ENTRY

OF

DEPARTMENT .

PRIVATE SECTOR

PARADIGM SHIFT IN

GOVERNMENT POLICY

CAME IN THE EARLY NINETIES WHEN THE

TELECOMMUNICATION SECTOR WAS OPENED UP TO THE PRIVATE SECTOR .

THE

PROCESS OF ENTRY OF PRIVATE OPERATORS IN PROVIDING TELECOMMUNICATION

SERVICES IN INDIA COMMENCED IN

1992. APART

FROM PRIVATIZING BASIC TELEPHONE SERVICES

GOVERNMENT

ALSO DECIDED TO

INTRODUCE A NUMBER OF VALUE ADDED SERVICES THROUGH PRIVATE OPERATORS ,

SUCH AS CELLULAR MOBILE TELEPHONES , RADIO PAGING , E -MAIL, INTERNET , CLOSED
USER GROUPS

(CUG),

ETC., WHICH ADD TO THE VALUE OF THE EXISTING BASIC

TELEPHONE SERVICES .

60

4.5.
ENTRY

REGULATORY

CONTROL

OF PRIVATE SERVICE PROVIDERS BROUGHT WITH IT THE INEVITABLE NEED FOR

INDEPENDENT REGULATION .

TELECOM REGULATORY AUTHORITY

WAS THUS ESTABLISHED WITH EFFECT FROM

PARLIAMENT

CALLED

OF INDIA

20 FEBRUARY 1997

TELECOM REGULATORY AUTHORITY

BY AN

OF INDIA

(TRAI)

ACT

OF

ACT, 1997,

TO

REGULATE THE TELECOM SERVICES , INCLUDING FIXATION /REVISION OF TARIFFS FOR

TELECOM SERVICES WHICH WERE EARLIER VESTED IN THE

THE TRAI ACT

CENTRAL GOVERNMENT .

WAS AMENDED BY AN ORDINANCE EFFECTIVE FROM

24 JANUARY 2000

SEPARATING THE ADJUDICATORY AND DISPUTES FUNCTIONS FROM THE

ESTABLISHING A

TELECOMMUNICATIONS DISPUTE SETTLEMENT

TRIBUNAL (TDSAT). TDSAT

TRAI

BY

APPELLATE

AND

ADJUDICATES ANY DISPUTE BETWEEN A LICENSOR AND A

LICENSEE , BETWEEN TWO OR MORE SERVICE PROVIDERS , BETWEEN A SERVICE

PROVIDER AND GROUP OF CONSUMERS , AND TO HEAR AND DISPOSE OF APPEALS
AGAINST ANY DIRECTION , DECISION OR ORDER OF

TRAI. A

BETTER MODEL WOULD

HAVE BEEN TO PUT THE INDEPENDENT REGULATOR IN PLACE EARLY IN THE NINETIES
ALONG WITH THE OPENING UP OF SERVICES TO THE PRIVATE SECTOR .

KEEPING

IN VIEW THE INCREASING CONVERGENCE OF TELECOM , COMPUTERS ,

TELEVISION AND ELECTRONICS THE

GOVERNMENT

COMMUNICATION CONVERGENCE BILL 2001

THIS WAS THEREAFTER SENT TO THE

COMMUNICATIONS
REPORT

TO THE

AND INFORMATION

PARLIAMENT

IN

OF INDIA INTRODUCED THE

IN THE

LOK SABHA

ON

31 AUGUST 2001;

PARLIAMENTARY STANDING COMMITTEE

TECHNOLOGY

NOVEMBER 2002

ON

WHICH HAS PRESENTED ITS

AND THE OBSERVATIONS AND

RECOMMENDATIONS MADE BY IT WERE UNDER CONSIDERATION .

THE

BILL AIMS AT

PROMOTING , FACILITATING AND DEVELOPING IN AN ORDERLY MANNER THE CARRIAGE

AND CONTENT OF COMMUNICATIONS ( INCLUDING BROADCASTING ,
TELECOMMUNICATIONS AND MULTIMEDIA ), IN VIEW OF THE NECESSITY TO FACILITATE
DEVELOPMENT OF A NATIONAL INFRASTRUCTURE FOR AN INFORMATION BASED
SOCIETY, AND TO ENABLE ACCESS THERETO . I T ALSO SEEKS TO PROVIDE A CHOICE
OF SERVICES TO THE PEOPLE WITH A VIEW TO PROMOTING PLURALITY OF NEWS,
VIEWS AND INFORMATION .

THIS

REGULATORY AND LICENSING AUTHORITY WILL BE

61

KNOWN AS THE

COMMUNICATION COMMISSION

PRESENTLY BEING HANDLED BY

THE

BILL

DOT,

OF INDIA .

THE

WILL PASS ON TO THIS

LICENSING FUNCTION ,

COMMISSION. HOWEVER,

IS YET TO BE PASSED .

4.6 TELECOM POLICIES

THE

FIRST

NATIONAL TELECOM POLICY

WAS ANNOUNCED IN

1994,

WITH A MAJOR

THRUST ON UNIVERSAL SERVICE AND QUALITATIVE IMPROVEMENT IN TELECOM

SERVICES AND ALSO , OPENING OF PRIVATE SECTOR PARTICIPATION IN BASIC
TELEPHONE SERVICES . I N THE INITIAL ENTHUSIASM OF OPENING UP OF THE
TELECOMMUNICATIONS SECTOR , THE PRIVATE OPERATORS, IN THEIR BIDS , OFFERED
MUCH HIGHER AMOUNTS OF LICENCE FEE THAN THEY COULD EVENTUALLY MUSTER .

AS

A RESULT BY

3779.45

MAY 1999,

THEY HAD ACCUMULATED ARREARS TOTALING

CRORE PAYABLE TO

SECTOR CAME WITH THE

GOVERNMENT . A

RS

MAJOR LANDMARK IN THE TELECOM

NEW TELECOM POLICY 1999 (NTP-99)

WHICH ALLOWED

PRIVATE OPERATORS TO MIGRATE FROM FIXED LICENSE FEE REGIME TO A REVENUE

SHARING REGIME .

OTHER

PROVISIONS IN

NTP-99

WERE TO PERMIT

INTERCONNECTIVITY AND SHARING OF INFRASTRUCTURE AMONG VARIOUS SERVICE

PROVIDERS WITHIN THE SAME AREAS OF OPERATIONS , SEPARATION OF POLICY AND
LICENSING FUNCTIONS OF

DOT

FROM THE SERVICE PROVISION FUNCTION , OPENING

OF NATIONAL LONG DISTANCE SERVICES TO COMPETITION AND CARRYING OF BOTH

VOICE AND DATA TRAFFIC BY SERVICE PROVIDERS .

AS

OF

31 MARCH 2003,

UNRESTRICTED ENTRY HAS BEEN ALLOWED IN BASIC SERVICES ON REVENUE SHARING

BASIS, ALL TELECOM SERVICES HAVE BEEN OPENED UP FOR PRIVATE SECTOR
PARTICIPATION , NATIONAL AND INTERNATIONAL DATA CONNECTIVITY HAS BEEN
OPENED TO ALL AND INTERNET SERVICES HAVE ALSO BEEN OPENED UP WITHOUT ANY
RESTRICTION ON THE NUMBER OF ENTRANTS AND WITHOUT ANY ENTRY FEE.

NATIONAL

FREQUENCY ALLOCATION PLAN

WITH THE

RADIO REGULATIONS

(NFAP-2002)

OF THE INTERNATIONAL

HAS BEEN EVOLVED IN LINE

TELECOM UNION (ITU)

CATERING TO THE CONFLICTING DEMAND ON SPECTRUM .

62

FOR

4.7.
AS

CORPORATIZATION

A PART OF THE CONTINUING PROCESS OF OPENING UP OF THE SECTOR , AND IN

PURSUANCE OF
OUT FROM

NTP-99, DEPARTMENT

DOT

IN

IN THE COUNTRY .

OCTOBER 1999

SUBSEQUENTLY

DTS

AND

DTO

GOVERNMENT COMPANY
(INCORPORATED

ON

TELECOM SERVICES (DTS)

IN

JULY 2000, DTS

OF

WAS BIFURCATED AND A NEW

TELECOM OPERATIONS (DTO)

WAS

WERE FINALLY CORPORATIZED INTO A WHOLLY OWNED

NAMELY

BHARAT SANCHAR NIGAM LIMITED (BSNL)

15 SEPTEMBER 2000)

AND THEIR BUSINESS OF PROVIDING

TELECOM SERVICES IN THE COUNTRY WAS TRANSFERRED TO THIS

EFFECT FROM

WAS CARVED

FOR PROVIDING TELECOMMUNICATIONS SERVICES

DEPARTMENT

DEPARTMENT KNOWN AS THE

CREATED .

OF

1 OCTOBER 2000. T HE

CREATION OF

BSNL

COMPANY

WITH

IS EXPECTED TO PROVIDE

A LEVEL PLAYING FIELD IN ALL AREAS OF TELECOM SERVICES , BETWEEN

GOVERNMENT

4.8.

OPERATORS AND PRIVATE OPERATORS.

OTHER GOVERNMENT

BESIDES MTNL, BSNL

ORGANIZATIONS UNDER

AND

VSNL,

OTHER

TELECOM SECTOR

GOVERNMENT

UNDERTAKINGS UNDER TELECOM SECTOR WERE

OWNED PUBLIC SECTOR

ITI L IMITED (ITI), HINDUSTAN

TELEPRINTERS LIMITED (HTL), T ELECOMMUNICATIONS CONSULTANTS INDIA LIMITED

(TCIL), I NTELLIGENT COMMUNICATION SYSTEMS INDIA LIMITED (ICSIL)
MILLENNIUM TELECOM LIMITED (MTL). ITI L IMITED

WAS FORMED IN

AND

1948

FOR

MANUFACTURING A WIDE RANGE OF EQUIPMENT , WHICH INCLUDES ELECTRONIC

63

SWITCHING EQUIPMENT , TRANSMISSION EQUIPMENT AND TELEPHONE INSTRUMENTS OF

VARIOUS TYPES .

TELEPRINTERS

HTL

DECEMBER 1960

WAS ESTABLISHED IN

AND ANCILLARY EQUIPMENT .

TCIL

FOR MANUFACTURE OF

WAS ESTABLISHED IN

1978

FOR

PROVIDING KNOW -HOW IN ALL THE FIELDS OF TELECOMMUNICATIONS AT GLOBAL

LEVEL .

THE

CORE COMPETENCE OF

TCIL

IS IN COMMUNICATIONS NETWORK

PROJECTS, SOFTWARE SUPPORT , SWITCHING AND TRANSMISSION SYSTEMS , CELLULAR

SERVICES , RURAL TELECOMMUNICATIONS AND OPTICAL FIBER BASED BACKBONE
NETWORK.

ICSIL

WAS ESTABLISHED IN

APRIL 1987

FOR MANUFACTURING COMPUTER

BASED COMMUNICATION SYSTEMS AND EQUIPMENT . I T ALSO PROVIDES ENGINEERING ,

TECHNICAL AND MANAGEMENT CONSULTANCY SERVICES FOR COMPUTERS AND
COMMUNICATIONS SYSTEMS IN INDIA AND ABROAD .

FEBRUARY 2000
INTERNET

AS A WHOLLY OWNED SUBSIDIARY OF

WAS ESTABLISHED IN

MTNL

FOR PROVISIONING OF

SERVICES IN THE COUNTRY . I T IS PURSUING ESTABLISHMENT OF

BROADBAND INTERNET

ACCESS FOR THE CORPORATE SEGMENT AND

INTERNET PROTOCOL (VOIP)

ADDITION TO

C-DOT

AND

VSATS

ETC.

TELECOM COMMISSION ,

OTHER

GOVERNMENT

ORGANIZATIONS ENGAGED IN THE TELECOM SECTOR (AS A PART OF

TELECOM ENGINEERING CENTRE (TEC)

COORDINATION (WPC)

WING.

VOICE OVER

TELEPHONY SERVICES THROUGHOUT I NDIA WITH USE

OF RELEVANT TECHNOLOGIES LIKE

IN

MTL

C-DOT

AND THE

DOT)

WIRELESS PLANNING

WAS ESTABLISHED IN

1984

WERE

AND

WITH THE

OBJECTIVE OF DEVELOPING A NEW GENERATION OF DIGITAL SWITCHING ITEMS .

DOT

C-

HAS DEVELOPED A WIDE RANGE OF SWITCHING AND TRANSMISSION PRODUCTS

BOTH FOR THE RURAL AND URBAN APPLICATIONS .

WORKS AS A PART OF

DOT

TEC

IS AN INSTITUTION , WHICH

AND IS DEVOTED TO PRODUCT VALIDATION AND

STANDARDIZATION FOR THE USER AGENCIES . I T ALSO PROVIDES TECHNICAL AND

ENGINEERING SUPPORT TO
OF

DOT

TELECOM COMMISSION

AND FIELD UNITS.

WPC

IS A WING

THAT DEALS WITH THE POLICY OF SPECTRUM MANAGEMENT , LICENSING ,

FREQUENCY ASSIGNMENTS , INTERNATIONAL COORDINATION FOR SPECTRUM

MANAGEMENT AND ADMINISTRATION OF THE INDIAN

64

WIRELESS TELEGRAPH ACT 1933.

4.9.

DISINVESTMENT

OF

PSUS

65

GOVERNMENT HAS DISINVESTED ITS MAJOR SHAREHOLDING IN HTL

DURING OCTOBER 2001 AND IN VSNL DURING FEBRUARY 2002 AND
SINCE THEN THESE UNDERTAKINGS HAS
OWNED

PSU S.

4.10. F INANCIAL

PERFORMANCE

66

CEASED TO BE

GOVERNMENT

TELECOM

LANDSCAPE IN INDIA HAS CHANGED COMPLETELY SINCE LIBERALIZATION

AND MONOPOLIES IN
REGIME

TELECOM

(OLIGOPOLIES ). IT

ERSTWHILE

DOT

SECTOR HAVE BEEN REPLACED WITH COMPETITIVE

IS A WELL- KNOWN FACT THAT

BSNL

TO PROVIDE LEVEL PLAYING FIELD TO PRIVATE

WAS CARVED OUT OF

TELECOMS . SINCE

THEN MANY NEW BUSINESS FIRMS HAVE ENTERED IN THE ARENA AND TODAY THERE IS
MERCILESS CUTTHROAT COMPETITION IN THIS SECTOR .

EVEN

THOUGH COMPETITION

IS BONANZA FOR SUBSCRIBERS BUT FOR CORPORATES IT IS THE QUESTION OF

SURVIVABILITY . I F THEY ARE NOT IN A POSITION TO EARN SUFFICIENT REVENUE FROM
THE OPERATIONS WHICH NOT ONLY MEETS THEIR GROWTH AND EXPANSION PLANS
BUT ARE NECESSARY FOR PAYING ALL
SHARE , SPECTRUM CHARGES ,

USO

LEVIES AND DUES AS REVENUE

FUND CONTRIBUTION ETC. AS WELL AS MEETING

OPERATION

INTERNAL REQUIREMENTS LIKE

STAFF

GOVERNMENT

AND

COSTS , I NTEREST AND REPAYMENT OF

ADMINISTRATION

DEBT

ETC.

EXPENDITURES ,

CORPORATES

ARE ALSO

UNDER TREMENDOUS PRESSURE FROM INVESTORS TO SHOW BETTER RESULTS SO

THAT THEY ALSO GET HANDSOME RETURNS ON THEIR INVESTMENTS IN THE FORM OF

DIVIDENDS

OR APPRECIATION IN SHARE VALUES .

TO

MEET ALL SUCH REQUIREMENTS

CORPORATE MANAGEMENT SOME TIME INDULGES INTO CREATIVE ACCOUNTING TO

ARTIFICIAL BOOST THE PROFIT FIGURES BECAUSE AT THE END OF DAY IT IS THE
PROFIT, WHICH MATTERS MOST
NON - PROFIT ORGANIZATION.

TOO

THERE

ANY BUSINESS ORGANIZATION IF IT IS NOT A

IS MANDATORY REQUIREMENT FOR ALL

COMPANIES TO FILE FOLLOWING THREE AUDITED STATEMENTS TO

BOARD

AT THE CLOSURE OF EVERY FINANCIAL

LAST DAY OF FINANCIAL YEAR ,

ACCOUNTING YEAR AND

CASH

PROFIT

COMPANY LAW

YEAR I.E. BALANCE SHEET

AS ON THE

AND LOSS ACCOUNT FOR THE WHOLE

FLOW STATEMENT .

FOR

STAKE HOLDERS AND

INVESTORS IT BECOMES NECESSARY TO LOOK BEYOND THE FIGURES QUOTED IN

THESE STATEMENTS AND CARRY OUT THE IN DEPTH FINANCIAL ANALYSIS TO TAKE
APPROPRIATE DECISION REGARDING THEIR INVESTMENT AND OTHER IMPORTANT
DECISIONS . I N RESPECT OF

BALANCE SHEET

AND

BSNL

PROFIT

AND

ANALYSIS CARRIED OUT IS BASED ON ITS AUDITED

LOSS ACCOUNTS

REPORTS .

67

TAKEN FROM ITS ANNUAL

ROLE

OF

COMMUNICATION

PROPORTION

OF

SERVICES IN NATIONAL GROWTH:

COMMUNICATION SERVICES

IN

RATE, AS IT IS EVIDENT FROM THE FOLLOWING

GDP

IS INCREASING AT FASTER

TABLE.

Service Sector Share in GDP

Share % in
GDP (2002-03)
5.4

Growth
2002-03
7.3

Trade

14.0

4.5

Hotels & Restaurants

1.1

4.0

Railway

1.1

5.7

Other Transport

4.3

6.0

Storage

0.1

-7.8

Communications

3.5

22.0

Banking & Insurance

Real Estate, Business / Legal
Services
Defence
Other Community & social
Services
Total Service Sector

6.9

11.6

6.1

5.9

5.9

5.3

7.8

6.2

56.1

7.2

Construction

FROM

ABOVE

SERVICES

TABLE
GDP

IN

IT IS CLEAR THAT GROWTH RATE

IS

HIGHEST

AND

(22%)

PROPORTION

AND

COMMUNICATION SERVICES IS CONTINUOUSLY INCREASING .

GROWTH ENGINE FOR OVERALL ECONOMIC GROWTH .
THE EXPONENTIAL GROWTH OF
OF NOW TOTAL TELEPHONES
HAS CROSSED
OF

58

LACKS

OF

TELECOMMUNICATION

NEW

TELECOMMUNICATION

(BASIC + MOBILE)

15 CRORES. IN

GRAPH

THE MONTH OF

MOBILE

OF COMMUNICATION

IT

IMPORTANCE

IS CONSIDERED AS

GIVEN BELOW INDICATES

INFRASTRUCTURE IN INDIA .

AS

OF ALL OPERATORS PUT TOGETHER

AUGUST-2006

SUBSCRIBER .

SUCH

THERE WAS ADDITION

IS

GROWTH

IN INDIA , EVEN NOW SURPASSING TO THE GROWTH IN

68

OF

OF

CHINA.

Growth of Telecommunications in India

Growth of Telecommunications in India
F ix es Line
Telephones

80
70
60
50
40
30
20
10
0

Cellular Mobile
Telephones
Private Basic
Telephone

IN

94
M
ar
-1
99
6
M
ar
-1
99
8
M
ar
-2
00
0
M
ar
-2
00
2
M
ar
-2
00
4

r-1
9

92
M
a

r-1
9

M
a

M
ar

-1
98
1

Tot al Telephones

SUCH A VOLATILE SCENARIO , KNOWING ABOUT THE PERFORMANCE OF A COMPANY

BECOMES VERY IMPORTANT .

FINANCIAL

PERFORMANCE IS A BED ROCK FOR OVERALL

PERFORMANCE AND FUTURE GROWTH OF ANY COMPANY .

K EEPING

THIS VIEW IN MIND

HAVE TRIED TO PUT SOME RELEVANT FACTS THROUGH THIS ARTICLE .

69

A.

AS

FINANCIAL

ON

MTL

31 MARCH 2003,

SIX

PSUS

PSUS

UNDER

NAMELY

BSNL, MTNL, ITI, TCIL, ICSIL

SOME

OF THE IMPORTANT FINANCIAL

PERFORMANCE INDICATORS OF THESE

PSUS

FOR THE YEAR ENDED

INVESTM

31 MARCH

TOT

DIVIDEND

CA

PROFIT

ENT IN

AL

PAID ON

PIT

BEFORE

SHARES

INCO

GOVT.

AL

BY

ME

EQUITY

EM

GOVERN

EAR

INVESTME

PLO

MENT

NED

NT

YED

GOVT. LOANS

EQUITY

PREFERENCE

SHARES

SHARES

BSNL 5000.00

MTNL 354.37

7500.00

0.00

0.00

TAX

(PBT)

PERCENTAGE
OF

PBT

TO

CAPITAL
EMPLOYED

TOTAL

IN CRORE )

12500.00 750

354.37

2819

67.47

%
250.0

54612.57

2657.90

8451.15

1237.19

15

0.00

1460.49

(376.67)

(26)

21.60

411.01

51.50

13

0.00

0.44

0.57

130

0.00

3.21

1.02

32

1.00 2.60

0.00 6030

159.4

.67
67.47

AND

WERE AS UNDER :

(RUPEES

ITI

TELECOM SECTOR

WERE IN THE TELECOM SECTOR .

2003
PSU

PERFORMANCE OF

0.00 1767

.96
TCIL

14.40

0.00

14.40

0.00 590.
44

ICSIL

0.00

0.00

0.00

0.00 16.9
2

MTL

0.00

0.00

0.00

0.00 2.66

70

TOTAL 5436.24

7500.00

12936.24 750

3660

431.0

1.00 1.25

64938.87

3571.51

As could be seen from the above table, on Equity capital investment of Rs 5,436.24
crore in these five PSUs, Government received dividend of Rs 431.07 crore which
works out to only 7.93 per cent. On Preference capital investment of Rs 7,500 crore
Government did not receive any dividend as BSNL has been exempted from
payment of dividend up to 31 March 2004. The total income and profit before tax
earned by these PSUs during the year were Rs 36,601.25 crore and Rs 3,571.51
crore, respectively. On total capital employed of Rs 64,938.87 crore in above PSUs,
the overall percentage of profit before tax worked out to only 5 per cent.
The individual financial performance of each of these PSUs is also discussed in the
succeeding chapters
4.11 FOREIGN DIRECT INVESTMENT
AS

A RESULT OF POSITIVE RESPONSE TO THE INVESTMENT POLICY BEING PURSUED

FOR THE TELECOM SECTOR , MORE THAN

FOREIGN DIRECT INVESTMENT

DECEMBER 2002
2002)

ITSELF .

(FDI)

OF

11

PER CENT OF THE TOTAL INFLOW OF

RS 9,562

CRORE DURING

HAS COME DURING THE LAST ONE YEAR

OF RS 9,562

CRORE OF

FDI

AUGUST 1991

(JANUARY

TO

TO

DECEMBER

IN TELECOM SECTOR , MORE THAN

28

PER

CENT HAS COME FOR CELLULAR MOBILE AND BASIC TELEPHONE SERVICES .

4.12

EMPLOYMENT

AS

31 MARCH 1981

ON

(EXCLUDING

GENERATION
THERE WERE AROUND

2.80

LAKH

GOVERNMENT

INDUSTRIAL WORKERS ) WORKING IN THE TELECOM SECTOR .

EMPLOYEES

WITH

THE

GROWTH OF THE SECTOR , THIS NUMBER HAS ALSO GONE UP AND AS AT THE END OF

31 MARCH 2003
(EXCLUDING
MTNL);

THERE WERE AROUND

4.12

LAKH

GOVERNMENT

INDUSTRIAL WORKERS ) WORKING IN THIS SECTOR

EMPLOYEES

(DOT, BSNL

AND

THIS REPRESENTED GROWTH IN EMPLOYMENT GENERATION BY AROUND

PER CENT OVER THE LAST

22

YEARS .

71

47

4.13 CONTRIBUTION

OF THE PRIVATE AND PUBLIC SECTORS IN TELECOM

NETWORK

PRIVATE

SECTOR HAS BEEN ALLOWED ENTRY IN BASIC AS WELL AS VALUE ADDED

SERVICES SUCH AS CELLULAR MOBILE TELEPHONE SERVICE , RADIO PAGING ,

INTERNET , NATIONAL AND INTERNATIONAL LONG DISTANCE SERVICES , GLOBAL MOBILE
PERSONAL COMMUNICATION SERVICE ,

V-SAT

SERVICE , ETC.

PRIVATE SECTOR AND PUBLIC SECTOR

(MTNL & BSNL)

FIELDS OF NATIONAL TELECOM NETWORK AS ON

SL.

TELECOM NETWORK

IN SOME OF THE IMPORTANT

(MTNL & BSNL)

DIRECT

EXCHANGE LINES

WAS AS UNDER :

PRIVATE

SECTOR

TOTAL

SECTOR

(FIGURES
1.

CONTRIBUTION OF

31 AUGUST 2003

PUBLIC

NO.

THE

IN LAKH )

404.20

51.80

456.00

114.97

NIL

114.97

5.05

0.12

5.17

39.90

134.00

173.90

14.80

NIL

14.80

9.91

22.00

31.91

(INCLUDING WLL)
2.

RURAL

DIRECT EXCHANGE

LINES ( INCLUDING

3.

VILLAGE

4.

CELLULAR

WLL)

PUBLIC TELEPHONES
MOBILE

CONNECTIONS

5.

PUBLIC CALL OFFICES (AS

ON

30 JUNE 2003)
6.

INTERNET
ON

CONNECTIONS ( AS

31 MARCH 2003)

The growth in fixed lines (DELs) and cellular mobile telephones in India during 31
March 1999 to 31 August 2003 was as given in the chart.

72

FIXED

LINES TELEPHONES

AS ON

31 MARCH 1999

(DELS

TO

WLL)

INCLUDING

456.00

LAKH AS OF

REPRESENTED GROWTH OF MORE THAN

111

INCREASED FROM

31 AUGUST 2003

215.90

LAKH

WHICH

PER CENT DURING THIS PERIOD . I N CASE

OF CELLULAR MOBILE TELEPHONES , HOWEVER , THE NUMBER OF CONNECTIONS HAS

INCREASED DRAMATICALLY FROM
LAKH AS OF

31 A UGUST 2003,

12.00

LAKH AS ON

31 MARCH 1999

TO

173.90

WHICH REPRESENTED A TREMENDOUS GROWTH OF

MORE THAN FOURTEEN - FOLD DURING THIS PERIOD .

SIMILARLY
AND

THE POSITION OF DEMAND AND SUPPLY OF TELEPHONES

CELLULAR )

2003)

IN INDIA DURING THE YEARS

WAS AS UNDER :

73

1980-81

TO

(DELS, WLL

2002-03 ( UP

TO

AUGUST

AS

CAN BE SEEN, AGAINST THE DEMAND OF

1981,

THE DEMAND AS ON

31 A UGUST 2003

TWENTY -FOUR - FOLD GROWTH IN DEMAND .

ABOVE DEMAND WAS
AS ON

22

31 AUGUST 2003

SUPPLY.

HOWEVER,

26

WAS

THE

31 MARCH

LAKH TELEPHONES AS ON

649

LAKH REPRESENTING AROUND

SUPPLY OF TELEPHONES AGAINST

LAKH TELEPHONES AS ON

31 MARCH 1981

AND

630

LAKH

REPRESENTING AROUND TWENTYEIGHT -FOLD GROWTH IN

SUPPLY OF TELEPHONE CONNECTIONS IN INDIA WAS NEVER

ADEQUATE TO MEET THE DEMAND FULLY IN ANY OF THE LAST OVER

22

4.14 WIRELESS

MOBILE

IN LOCAL LOOP (MOBILE ) SERVICE VS.

CELLULAR

YEARS .

TELEPHONE SERVICE

BASED

ON

TRAI S

JANUARY 2001

RECOMMENDATIONS OF

THE

8 JANUARY 2001, DOT

BASIC SERVICE PROVIDERS (BSPS)

ALLOWED IN

TO PROVIDE MOBILITY TO

THEIR SUBSCRIBERS RESTRICTED TO LOCAL AREA I.E . SHORT DISTANCE CHARGING

AREA

(SDCA). HOWEVER,

CHALLENGED THIS DECISION OF

DOT

APPELLATE TRIBUNAL (TDSAT),

WAS AGAINST THE

MARCH 2002

(CMSPS)

CELLULAR MOBILE SERVICE PROVIDERS

TELECOM DISPUTES SETTLEMENT

IN THE

PARTICULARLY ON THE GROUND THAT THE DECISION

NTP-99. I NITIALLY TDSAT

BUT ON THE DIRECTION OF

DISMISSED

CMSPS

TDSAT

ON

AND NO HANDOVER FROM ONE

WAS ALLOWED UNDER ANY CIRCUMSTANCE .

TDSAT

SHOULD CONSIDER ISSUING RECOMMENDATIONS TO

OF INDIA TO

WLL (M)

SDCA

SERVICE

TO ANOTHER

FURTHER OBSERVED THAT

GOVERNMENT

FOLLOWING ISSUES TO RESOLVE THE MATTER BETWEEN

15

8 AUGUST 2003

OBSERVED THAT IT WAS IMPORTANT TO ENSURE THAT MOBILITY OF

SDCA

PETITION ON

HONBLE SUPREME COURT

RECONSIDER THE MATTER ON SPECIFIC POINTS,

REMAINED RESTRICTED TO

AND

WLL (M)

TRAI

ON THE
OPERATORS AND

CELLULAR MOBILE OPERATORS :

ADDITIONAL

ENTRY FEE PAYABLE BY

ADDITIONAL

SPECTRUM FEE CHARGEABLE FOR THE ADDITIONAL SPECTRUM

BEYOND

RELIEF

5 MH Z

FOR

WLL (M)

BSPS

FOR PROVIDING

WLL (M)

SERVICE ,

SERVICE ,

TO CELLULAR MOBILE OPERATORS WITH REGARD TO POINTS OF

INTERCONNECTION BETWEEN

CMSPS

74

AND

BSPS,

AND

INCREASING

THE RETENTION OF

PER CENT ACCESS CHARGE TO A

REASONABLE LEVEL .

ACCORDINGLY , DOT
THE ABOVE ISSUES .

ON

18 AUGUST 2003

THEREAFTER,

ON

SOUGHT

TRAI S

RECOMMENDATIONS ON

28 AUGUST 2003 TRAI

HAS RELEASED A

CONSULTATION PAPER TO ALL STAKEHOLDERS FOR OBTAINING THEIR FEEDBACK ON

THESE ISSUES BEFORE IT FORMULATES RECOMMENDATIONS TO THE

4.15

THE

WITH

GOVERNMENT .

PICTURE AHEAD

THE RAPID UP GRADATION OF TECHNOLOGY AND THE ENTRY OF PRIVATE

PLAYERS IN THE TELECOM SECTOR IT IS EXPECTED THAT THE COMPETITIVE

ENVIRONMENT WILL LEAD TO GREATER FACILITIES FOR THE SUBSCRIBERS AT LOWER
COST .

EVEN

BY WAY OF COVERAGE, THE TELE - DENSITY IS PROPOSED TO BE

INCREASED FROM THE PRESENT

TO

BY

2005

AND TO

15

BY

5.72

TELEPHONES PER HUNDRED

2010.

5. INDIAN TELECOM
5.1:- MARKET OVERVIEW
5.2:- MARKET TRENDS

75

POPULATIONS

5.3:- COMPETITION
5.4:- S ALES PROSPECTS
5.5:-MARKET ACCESS
5. 6:-TELECOM EXHIBITIONS

76

5.0 SUMMARY
THE INDIAN TELECOMMUNICATIONS

NETWORK WITH

70

MILLION CONNECTIONS IS THE

FIFTH LARGEST IN THE WORLD AND THE SECOND LARGEST AMONG THE EMERGING

ASIA. TODAY,

ECONOMIES OF

IT IS THE FASTEST GROWING MARKET IN THE WORLD

AND REPRESENTS UNIQUE OPPORTUNITIES FOR INTERNATIONAL COMPANIES IN THE

STAGNANT GLOBAL SCENARIO .
REACH

1.6

203

MILLION IN

1999

MILLION IN

THE

2007. THE

TO

28.2

TOTAL SUBSCRIBER BASE IS EXPECTED TO

WIRELESS SUBSCRIBER BASE HAS JUMPED FROM

MILLION IN

2003. IN

THE LAST

YEARS , TWO OUT OF

EVERY THREE NEW TELEPHONE SUBSCRIBERS WERE WIRELESS SUBSCRIBERS .

CONSEQUENTLY ,

WIRELESS NOW ACCOUNTS FOR

SUBSCRIBER BASE , AS COMPARED TO ONLY

9.5%

40%
IN

OF THE TOTAL TELEPHONE

2000. W IRELESS

GROWTH IS EXPECTED TO ACCELERATE FURTHER FROM

PER MONTH NOW TO

GIVEN

2.5

MILLION BY

SUBSCRIBER

MILLION NEW SUBSCRIBERS

2005.

THE PERSISTENT LOW TELEPHONE PENETRATION RATE OF ABOUT

PER ONE

HUNDRED AND HIGH LEVELS OF OVERALL ECONOMIC GROWTH, THE TELECOM SECTOR
OFFERS VAST POTENTIAL .
CUSTOMERS .

IT

THE

MOBILE MARKET RECENTLY TOPPED

31

MILLION

IS THEREFORE NOT SURPRISING THAT INDIA IS ONE OF THE FASTEST

GROWING TELECOM MARKETS WITH AN AVERAGE ANNUAL GROWTH OF ABOUT

FOR BASIC TELEPHONY AND OVER

RECOGNIZING

100%

22%

FOR CELLULAR AND INTERNET SERVICES .

THAT THE TELECOM SECTOR IS ONE OF THE PRIME MOVERS OF

ECONOMY , THE

GOVERNMENT 'S

REGULATORY AND POLICY INITIATIVES HAVE BEEN

DIRECTED TOWARDS ESTABLISHING A WORLD -CLASS TELECOMMUNICATIONS

INFRASTRUCTURE .

CAPITAL

INVESTMENTS OF AT LEAST

THE

ARE PRIMARILY

10

AND

BILLION BY

2005

100

2000

OPERATORS AND

STATE- OF- THE- ART

$8

$69

BILLION BY

GLOBAL SYSTEM

FOR

COMPANIES PROVIDING MOBILE SERVICES IN

4 GSM

INVESTMENT OF

AND

INDIA

REQUIRES

2010.

MOBILE

CODE DIVISION MULTIPLE ACCESS (CDMA). T HERE

METRO CITIES, COVERING

THERE ARE
ARE

$37

TECHNOLOGIES CURRENTLY IN USE ARE

COMMUNICATIONS (GSM)

AND

REQUIREMENTS ARE CONSIDERABLE .

19

TELECOM CIRCLES

TOWNS ACROSS THE COUNTRY .

2 CDMA

OPERATORS IN EACH CIRCLE .

NETWORKS (GSM + CDMA)

BILLION .

77

PRESENTLY
THERE

ON AIR WITH A TOTAL

The Wireless Planning and Co-ordination wing of the Department of

Telecommunications allocates
spectrum in accordance with the National Frequency Allocation Plan (NFAP). The
NFAP is revised every two years according to the radio regulations of ITU.
According to the frequency plan, the frequency band 824-844 MHz paired with 869889 MHz has been earmarked for CDMA operators; 890-915 paired with 935-960
MHz has been earmarked for GSM mobile operators; 1710-1785 MHz paired with
1805-1880 MHz is also reserved for GSM and CDMA operators.

78

5.1 MARKET OVERVIEW

THE

GROWTH TRENDS IN INDIAN TELECOM MIRROR THOSE IN THE GLOBAL INDUSTRY .

WIRELESS

HAS BEEN THE PRINCIPAL GROWTH ENGINE , ACCOUNTING FOR TWO- THIRDS

OF THE TOTAL TELECOM SUBSCRIBER ADDITIONS DURING THE LAST THREE YEARS .

THE INDIAN

TELECOM INDUSTRY IS POISED TO GROW EXPONENTIALLY .

WIRELESS

SECTOR WILL BECOME STRONGER IN THE UNIFIED LICENSING ENVIRONMENT , AND

WIRELESS HAS ALREADY SURPASSED WIRE LINE CONNECTIONS .

20

CROSS

PERCENT IN THE NEXT FIVE YEARS , BEATING THE

TELEDENSITY

GOVERNMENT

WILL

OF INDIA S

TARGET BY THREE YEARS , WHILE TELECOM REVENUES WILL ALMOST TRIPLE FROM
BILLION IN

THE

2003

TO

$23-25

BILLION BY

$9

2007.

WIRELESS REVOLUTION WILL BE FUELLED BY SEVERAL FACTORS.

THE

AFFORDABILITY OF WIRELESS FOR THE MASSES WILL BE SUSTAINED ON ACCOUNT OF

LOW TARIFFS , CHEAP HANDSETS AND ATTRACTIVE FINANCING SCHEMES .

WIRELESS

OPERATORS WILL CONTINUE TO FOCUS ON PREPAID PRODUCTS IN ORDER TO

INCREASE THE ADOPTION OF WIRELESS AMONG THE LOWER MIDDLE INCOME AND
LOW - INCOME GROUPS .

WIRELINE

USERS WILL INCREASINGLY MIGRATE TO WIRELESS ,

LURED BY THE BENEFITS OF MOBILITY AND THE ATTRACTIVE BUNDLED PLANS THAT
ARE BEING LAUNCHED BY THE WIRELESS OPERATORS.
WILL ALSO BECOME A GROWING REVENUE STEAM.
DEPLOYED

3G

WIRELESS

SOME

TECHNOLOGIES ON THEIR NETWORKS.

DATA SERVICES

OPERATORS HAVE ALREADY

WITH

FURTHER ROLLOUT , IT

WILL ACCOUNT FOR A SIGNIFICANT PORTION OF THE WIRELESS REVENUE PIE.

AS

FEBRUARY 2004

OF

WHICH

24.65

THE TOTAL MOBILE MARKET HAD REACHED

MILLION SUBSCRIBERS WERE

GSM

7.02

AND

(EXCLUDING BHARAT SANCHAR NIGAM LIMITED [BSNL]

TELEPHONE NIGAM LIMITED [MTNL]). O F
6.822

MILLION SUBSCRIBERS

MILLION

(GSM), BSNL

(GSM),

AND IDEA

56

2003,

2010. T HE

FULL

HAD

MILLION ,

2.584

AND

MILLION

ACCORDING TO
OF INDIA ,

HAD

4.826

(GSM). M OBILE

PER THE

HAD

HAD

6.199

MILLION

CONNECTIONS

REPRESENTING A

GARTNER. AS

GSM

MAHANAGAR

0.757 GSM), B HARTI

2004,

CDMA

RELIANCE INFOCOMM

(GSM) HUTCH

MILLION BY THE END OF

OPERATORS ASSOCIATION
BY

4.954

CELLULAR

HAVE REACHED TO
INCREASE OVER

HAD

(6.065 CDMA

MILLION , OF

MILLION WERE

AND

THESE TOTALS ,

31.67

96

PER CENT

CELLULAR

MOBILES PHONE WILL REACH

471

MILLION

PACE OF GROWTH WILL ACCELERATE WITH THE INTRODUCTION OF

MOBILITY

CDMA

LOOP SERVICES AND THE ADOPTION OF UNIFIED LICENSES .

5.2 MARKET TRENDS

THE

MARKET FOR TELECOM SERVICES IN

BILLION .

$6.27

THE

2002-03

HAS BEEN ESTIMATED TO BE

$10.7

EQUIPMENT MARKET IS ESTIMATED TO HAVE REACHED A TURNOVER OF

BILLION IN

2002-03,

UP FROM

$5.71
79BILLION

IN

2001-02. THE

TELECOM

INDUSTRY COMPRISING SERVICES AND EQUIPMENT IS EXPECTED TO INCREASE TO

$24.29

BILLION BY

2006.

Despite the regular concessions to the private operators and the rapid pace at which
the mobile market is growing, foreign investors continue to withdraw from telecom
service joint ventures. Vodafone has sold its 20.76% stake in RPG Cellular, one of
the two original operators in Chennai, to the Sterling InfoTech group, promoted by
Chinnakannan Sivasankaran. AT&T decided to exit from its joint venture with BPL
Mobile Cellular by selling its 49% stake to its Indian partner BPL. The

80

acquisition of AT&Ts stake will give BPL flexibility in approaching other financially
strong investors. Telesystem International Wireless of Canada sold its 27.5% stake
in Hexacom, operator of mobile services in Rajasthan, to Hexacom. First Pacific
sold its 49% stake in Escotel to Idea Cellular. And Qualcomm dropped plans to
invest $200 million for a 4% equity stake in Reliance Infocomm.

5.3 COMPETITION
AS

NOTED EARLIER , THE GOVERNMENT INITIALLY ONLY PERMITTED TWO OPERATORS

IN EACH CIRCLE .

BUT

THE GOVERNMENT HAS NOW MOVED TO UNRESTRICTED ENTRY

AND UNLIMITED COMPETITION IN ALL TYPES OF SERVICES .

AS

A RESULT , THERE ARE

NOW MULTIPLE OPERATORS IN EACH SERVICE AND IN EACH LICENSE AREA .

ENTRY OF ADDITIONAL OPERATORS ( TYPICALLY
DRASTIC TARIFF REDUCTIONS .
THE

INDEED,

BSNL

OR

MTNL)

THE

HAD LED TO

THE COMPETITION WAS SO INTENSE THAT

TELECOM REGULATORY AUTHORITY

OF INDIA

(TRAI)

STOPPED SETTING THE

PRICE FOR MOBILE SERVICES AND ALLOWED THE MARKET TO SET PRICES .

THE

UNIFIED ACCESS LICENSE AND THE LIBERAL TAKEOVER AND FOREIGN DIRECT

INVESTMENT NORMS ARE EXPECTED TO CATALYZE CONSOLIDATION .

2004, TRAI

EARLY

IN

ADDITION , IN

PUBLISHED NORMS THAT WOULD , UNDER CERTAIN CONDITIONS ,

ALLOW INTRA -CIRCLE MERGERS ( I.E., AT THE REGIONAL LEVEL ) BETWEEN

OPERATORS .

MERGERS

WILL BE ALLOWED, FOR EXAMPLE , IF THE NEW ENTITY DOES

NOT HAVE A MARKET SHARE ABOVE

CIRCLE

IF

DOES

50%,

OR IF THE TOP TWO FIRMS IN A GIVEN

75%

NOT TOGETHER ACCOUNT FOR A MARKET SHARE OF

THESE CONDITIONS ARE NOT MET ,

TRAI

HAS ASKED THE

DOT

OR HIGHER .

TO CONDUCT A

DETAILED IMPACT STUDY ON THE PROPOSED MERGER BEFORE GRANTING ITS

APPROVAL .

THE

COMPETITIVE NATURE OF THE INDIAN MARKET LEADS ANALYSTS TO PREDICT

THAT THERE WILL BE A SPATE OF TAKEOVERS AT THE NATIONAL LEVEL IN

2005,

AND THAT ONLY THE LARGE OPERATORS

INFOCOMM, TATA, HUTCHISON-ESSAR, IDEA

AND

BHARTI -

WILL SURVIVE .

AIRCEL,

SERVICES IN THE SOUTHERN STATE OF

TAMIL NADU (EXCEPT CHENNAI ),

TAKEN

100%

STAKE IN

RPG C ELLULAR

WHICH OPERATES

IN THE CITY OF

GSM

475,705

CUSTOMERS IN

CUSTOMERS IN

TAMIL NADU

CHENNAI .

WHILE

RPG CELLULAR

THE

MOBILE
HAS IN

CHENNAI . AIRCEL

WILL NOW BE ABLE TO OFFER SERVICES IN THE CAPITAL CITY ALSO .

81

AND

- BSNL/MTNL, R ELIANCE

CONSOLIDATION HAS ALREADY BEGUN .

4Q03

2004

HAS

AIRCEL

212,823

HAD

82

c. BHARTI
ESTABLISHED

IN

1985, B HARTI

HAS BEEN A PIONEERING FORCE IN THE TELECOM

SECTOR WITH MANY FIRSTS AND INNOVATIONS TO ITS CREDIT , SUCH AS BEING THE
FIRST MOBILE SERVICE IN

DELHI ,

THE FIRST PRIVATE BASIC TELEPHONE SERVICE

PROVIDER IN THE COUNTRY , THE FIRST INDIAN COMPANY TO PROVIDE

COMPREHENSIVE TELECOM SERVICES OUTSIDE INDIA IN THE
FIRST PRIVATE SECTOR SERVICE PROVIDER TO LAUNCH

SERVICES
7, 1995

IN INDIA .

BHARTI TELE-VENTURES LIMITED

SEYCHELLES ,

AND THE

NATIONAL LONG DISTANCE

WAS INCORPORATED ON

FOR PROMOTING INVESTMENTS IN TELECOMMUNICATIONS SERVICES .

JULY

ITS

SUBSIDIARIES OPERATE TELECOM SERVICES ACROSS INDIA .

BHARTI S

OPERATIONS ARE BROADLY HANDLED BY TWO COMPANIES : THE

GROUP , WHICH HANDLES MOBILE SERVICES IN

16

MOBILITY

CIRCLES OUT OF A TOTAL

23

CIRCLES ACROSS THE COUNTRY , AND THE I NFOTEL GROUP , WHICH HANDLES THE

NLD, ILD,

FIXED LINE , BROADBAND , DATA , AND SATELLITE -BASED SERVICES .

TOGETHER

THEY HAVE SO FAR DEPLOYED AROUND

23,000

KM OF OPTICAL FIBER

CABLES ACROSS THE COUNTRY , COUPLED WITH APPROXIMATELY

HAVE PRESENCE IN AROUND
BASE OF

6.45
15

LOCATIONS .

MILLION , OF WHICH

CUSTOMERS , AS OF
ACROSS

200

5.86

THE

MOBILE ,

BHARTIS

COMPANY PLANS TO INVEST

CURRENT FINANCIAL YEAR .

IT

PLANS TO INSTALL

NODES , AND

GROUP HAS A TOTAL CUSTOMER

MILLION ARE MOBILE AND

JANUARY 31, 2004. I N

CIRCLES .

THE

1,500

29

$444

588,000

FIXED LINE

FOOTPRINT EXTENDS

BILLION IN THE

MOBILE SWITCHING CENTERS ,

BUY TRANSMISSION EQUIPMENT AND ALSO ROLL OUT NEW NETWORKS IN FIVE NEW
CIRCLES WITH AN ADDITIONAL INVESTMENT OF

D.

$155

MILLION .

MTNL

MAHANAGAR TELEPHONE NIGAM LIMITED (MTNL)

BY THE

GOVERNMENT

WAS SET UP ON

1ST APRIL 1986

OF INDIA TO UPGRADE THE QUALITY OF TELECOM SERVICES ,

EXPAND THE TELECOM NETWORK,

AND INTRODUCE

NEW SERVICES AND TO RAISE

REVENUE FOR TELECOM DEVELOPMENT NEEDS OF INDIA S KEY METROS IN

POLITICAL CAPITAL , AND

MUMBAI ,

THE BUSINESS CAPITAL .

IN

THE PAST

DELHI ,

17

THE

YEARS ,

THE COMPANY HAS TAKEN RAPID STRIDES TO EMERGE AS INDIA S LEADING AND ONE
OF

ASIAS

LARGEST TELECOM OPERATING COMPANIES .

MTNL

OPERATES BASIC , CELLULAR AND INTERNET SERVICES IN THE METRO CITIES OF

DELHI

AND

MUMBAI . THESE

TWO CITIES ALREADY HAVE A HIGH TELEPHONE DENSITY

COMPARED TO THE REST OF INDIA .

330,000
MTNL

MTNL

HAS OVER

MILLION SUBSCRIBERS AND

MOBILE SUBSCRIBERS .

PLANS TO ADD

MOBILE PHONES

1.6

83

MILLION LANDLINE /CDMA PHONES AND

BETWEEN 2002-2007. T HE

1.15

MILLION

COMPANY PLANS TO INVEST

GSM

$500

E.

RELIANCE INFOCOMM

RELIANCE

IS A

$16

BILLION CONGLOMERATE INVOLVED IN BUSINESSES RANGING

FROM OIL EXPLORATION AND REFINERY TO POWER AND TEXTILES .

IT

IS ALSO AN

INTEGRATED TELECOM SERVICE PROVIDER WITH LICENSES FOR MOBILE , FIXED ,

DOMESTIC LONG DISTANCE AND INTERNATIONAL SERVICES .

RELIANCE INFOCOMM

OFFERS A COMPLETE RANGE OF TELECOM SERVICES , COVERING MOBILE AND FIXED

LINE TELEPHONY INCLUDING BROADBAND , NATIONAL AND INTERNATIONAL LONG
DISTANCE SERVICES , DATA SERVICES AND A WIDE RANGE OF VALUE ADDED SERVICES
AND APPLICATIONS .
WAS LAUNCHED ON

RELIANCE INDIA MOBILE,

THE FIRST OF INFOCOMM ' S INITIATIVES

DECEMBER 28, 2002. R ELIANCE INFOCOMM

PLANS TO EXTEND

ITS EFFORTS BEYOND THE TRADITIONAL VALUE CHAIN TO DEVELOP AND DEPLOY
TELECOM SOLUTIONS FOR INDIA ' S FARMERS , BUSINESSES , HOSPITALS , GOVERNMENT
AND PUBLIC SECTOR ORGANIZATIONS .

UNTIL

RECENTLY ,

RELIANCE

WAS PERMITTED TO PROVIDE ONLY LIMITED MOBILITY

SERVICES THROUGH ITS BASIC SERVICES LICENSE .

A UNIFIED ACCESS LICENSE FOR
RANGE OF MOBILE SERVICES .
ENROLLED MORE THAN

IT

18

HOWEVER,

IT HAS NOW ACQUIRED

CIRCLES THAT PERMITS IT TO PROVIDE THE FULL

HAS ROLLED OUT ITS

CDMA

MOBILE NETWORK AND

MILLION SUBSCRIBERS IN ONE YEAR TO BECOME THE

COUNTRY S LARGEST MOBILE OPERATOR .

IT

NOW WANTS TO INCREASE ITS MARKET

SHARE AND HAS RECENTLY LAUNCHED PRE - PAID SERVICES .

84

F.

TATA TELESERVICES

TATA TELESERVICES
COMPANIES , OVER
SHAREHOLDERS .

CDMA

USING

IS A PART OF THE

200,000

$12

BILLION

TATA GROUP,

EMPLOYEES AND MORE THAN

TATA TELESERVICES

TECHNOLOGY IN SIX CIRCLES :

800,000

SUBSCRIBERS .

LICENSES , BY PAYING A

$120

IT

93

MILLION

PROVIDES BASIC (FIXED LINE SERVICES ),

MAHARASHTRA (INCLUDING MUMBAI ),

NEW DELHI , ANDHRA PRADESH, TAMIL NADU, GUJARAT ,

OVER

2.3

WHICH HAS

AND

KARNATAKA . IT

HAS

HAS NOW MIGRATED TO UNIFIED ACCESS

MILLION FEE, WHICH ENABLES IT TO PROVIDE FULLY

MOBILE SERVICES AS WELL.

THE

COMPANY IS ALSO EXPANDING ITS FOOTPRINT , AND HAS PAID

DOT

FOR

REGIME .

11

NEW LICENSES UNDER THE

THE

IUC (INTERCONNECT

MILLION TO

USAGE CHARGES )

NEW LICENSES , COUPLED WITH THE SIX CIRCLES IN WHICH IT

ALREADY OPERATES , VIRTUALLY GIVES THE

FOOTPRINT THAT IS ALMOST ON PAR WITH

CDMA

BSNL

MOBILE OPERATOR A NATIONAL

AND

COMPANY HOPES TO START OFF SERVICES IN THESE

2004. THESE

$90

CIRCLES INCLUDE

RELIANCE INFOCOMM . THE

11

NEW CIRCLES BY

AUGUST

BIHAR, HARYANA , HIMACHAL PRADESH , KERALA,

KOLKATA, ORISSA, PUNJAB, RAJASTHAN , UTTAR PRADESH (EAST ) & WEST

AND

WEST BENGAL.

MARKET

COMPANY

SHARE OF MOBILE SERVICE OPERATORS :

MILLION SUBS (FEB 2004)

RELIANCE

6.82

21.53

BHARTI

6.19

19.58

HUTCHISON
IDEA CELLULAR

4.82
3.52

SHARE

15.03
11.13

BPL

1.76

5.58

SPICE

1.18

3.74

AIRCEL

0.84

2.68

TATA INDICOM

0.63

1.99

MTNL

0.40

1.29

HEXACOM

0.27

0.87

HFCL

0.02
85

0.08

SALES PROSPECTS

India represents a huge opportunity for handset vendors. Gray market accounts for
over 60% of the handset market in India. Despite the market for over 10 million
handsets, all handsets are imported into India. Nokia, which has a 45% MARKET
share, has not ventured to manufacture locally and has instead recently got
permission for wholesale trading of imported handsets. Samsung follows with 21%
share, Motorola has 8% share. LG, Alcatel, Sagem, Sony-Ericsson, National
Panasonic
Siemens, Phillips and Mitsubishi together hold the remaining 26% market share.

The cellular sector is witnessing dynamic technology trends across the globe with
the entry of GPRS/EDGE networks and the anticipated entry of 3G networks in the
future. With voice revenues projected to shrink in the near future, GSM cellular
operators are turning to GPRS to keep their business growing. These technologies
would help enhance revenues for telecom operators by allowing data applications
such as:
Value-added services (news, stocks, sports results, weather information),
GEOGRAPHIC positioning systems (ones whereabouts, the nearest hotel, the route
to any destination), E-commerce for micro-payments, banking,
e-mails and images

UNTIL

LATE

2003,

CONTINUAL LITIGATION BETWEEN

GSM

AND

CDMA

OPERATORS

AROUND THE ISSUE OF FULL VERSUS LIMITED -MOBILITY FRANCHISE RIGHTS HAD
STALLED MARKET PROGRESS .

WITH

THE ENDING OF LITIGATION AND THE ADOPTION

OF A UNIFIED LICENSING REGIME , ALL OPERATORS CAN NOW CONCENTRATE ON

ROLLING OUT NETWORKS,

86

ATTRACTING SUBSCRIBERS AND IMPROVING SERVICES INSTEAD OF FIGHTING BATTLES

IN THE PRESS AND IN COURT .

INDIAS

TELECOMMUNICATIONS SECTOR IS NOW AMONG THE MOST DEREGULATED IN

THE WORLD AND PRESENTS POTENTIALLY LUCRATIVE OPPORTUNITIES FOR SERVICE

PROVIDERS AND EQUIPMENT VENDORS ALIKE .

FEW OF THE INTERNATIONAL

COMPANIES THAT HAVE SUCCESSFULLY SEIZED THE OPPORTUNITY ON BIG SCALES

ARE

AGILENT , CISCO, HP, HUGHES NETWORK SYSTEMS , LUCENT TECHNOLOGIES ,

MOTOROLA , QUALCOMM , TEKELEC, SPRINT , AT&T, MCI, L IGHTBRIDGE ,

AND

UT

STARCOM.
OPPORTUNITIES

FOR

BUYER

TELECOM

EQUIPMENT VENDORS

PROJECT NAME

VALUE (IN

POTENTIAL U.S. E XPORT

MILLIONS )

BSNL

FIXED

AND

MOBILE NETWORK EXPANSION

$2,900
MTNL

FIXED

AND

MOBILE NETWORK EXPANSION

$120
RELIANCE

RELIANCE CDMA & |O PTIC FIBER NETWORK

$4,000
BHARTI

BHARTI TELE-VENTURES

$250
IDEA

IDEA GSM ROLLOUT

HEXACOM

EXPANSION

OF

$1,100

GSM NETWORK

$10

87

IN

RAJASTHAN

HUTCHISON

HUTCHISON-ESSAR GSM NETWORK EXPANSION

$400
BPL

GSM EXPANSION

TATA

EXPANSION

OF

$700

CDMA

FIXED AND MOBILE SERVICES

$4,000

5.1 1

I NDIAN

COMMUNICATION EQUIPMENT INDUSTRY :

CATEGORY

R EVENUE

IN

US$ M ILLION
FY 2002-03

(STATED

AS

G ROWTH
FY 2001-02

%)

CARRIER EQUIPMENT
PRODUCT

2,813

SERVICES

522

ENTERPRISE EQUIPMENT
PRODUCT

897

1.39

88

828

SERVICES

158

127

21.99
OTHERS

GSM

398

PHONES

224

78.07
CDMA

125

PHONES

T&M

65

49

34.09
TELECOM SOFTWARE

1238

1038

243

161

19.25
CELLULAR

SERVICE

50.05
OTHERS

1886

1466

28.65
ACCORDING

TO

JP MORGAN STANLEY,

THE CELLULAR SEGMENT WILL BE A KEY

DRIVER IN THE GROWTH IN TELECOM SERVICES IN INDIA .

THE

SHARE OF PUBLIC

OPERATORS IN THIS MARKET IS LIKELY TO DIMINISH AND COMPETITION WOULD

ESTABLISH ITSELF FASTER AND GET A BIGGER CHUNK OF THE MARKET .

THIS

WOULD

BE LED BY FURTHER LIBERALIZATION , INCREASING CUSTOMER EXPECTATIONS ,

CONVERGENCE OF TECHNOLOGIES , AND THE ABILITY OF PRIVATE PLAYERS TO OFFER
IT TO THE MARKET FASTER THAN THE INCUMBENT OPERATOR .

CDMA

SERVICES WOULD INCREASE CONSIDERABLY , WITH

THE

MARKET SHARE OF

RELIANCE

DEPLOYING IT

ON A NATIONAL SCALE AND USING IT AS THEIR PRIMARY SERVICE OFFERING .

TELECOM

SERVICE PROVIDERS ARE INCREASINGLY FOCUSING ON CORPORATE

89

TELECOM SERVICES .

THOUGH

MARKET , IT IS THE REMAINING

RETAIL CONTRIBUTES MORE THAN

4-5

95

PERCENT OF THE

PERCENT OF THE MARKET , WHICH IS GETTING

MORE IMPORTANT FOR REVENUE GENERATION.

5.4 MARKET ACCESS

IN

ORDER FOR INTERNATIONAL COMPANIES TO ENTER THE MOBILE SERVICES IN INDIA ,

THEY HAVE TO COMPLETE THE FOLLOWING FORMALITIES :

FIND
IF

JV

PARTNER

(INDIAN

COMPANY ) WHO WILL HAVE

A NEW COMPANY , IT HAS TO FILE FOR

ONE

51

UNIFIED ACCESS

TIME ENTRY FEE OF RANGING FROM

$ 0.44

TO

$44

PERCENT STAKE;

SERVICE LICENSE ;

MILLION , DEPENDING ON THE

CIRCLE ;

QUARTERLY

REVENUE SHARE (AS PART OF LICENSE FEE): RANGING FROM

6-10%

DEPENDING ON THE CIRCLE ;

PERFORMANCE

BANK GUARANTEES WHICH IS EQUIVALENT TO FOUR TIMES THE

REVENUES /LICENSE FEE .

IN

ADDITION TO LICENSE FEES, THE CELLULAR LICENSEES PAY SPECTRUM CHARGES

ON A REVENUE SHARE BASIS OF

OF

AGR

FOR SPECTRUM UP TO

SPECTRUM BEYOND
MORE THAN

IN

500

TERMS OF

6.2 MH Z,

2%

OF

AGR

FOR SPECTRUM UP TO

6.2 MHZ THE

CHARGES WILL BE

4.4 MH Z

4%

OF

OR

AGR

3%

FOR

WHICH SHALL BE GIVEN IF THE SUBSCRIBER BASE IS

THOUSAND .

NTP-99,

CELLULAR OPERATORS WILL BE FREE TO PROVIDE , WITHIN

THEIR AREA OF OPERATIONS , ALL TYPES OF MOBILE SERVICES , INCLUDING VOICE AND

90

NON - VOICE MESSAGES , DATA SERVICES AND

PCOS

UTILIZING ANY TYPE OF NETWORK

EQUIPMENT , INCLUDING CIRCUIT AND/OR PACKAGE SWITCHES THAT MEET THE

RELEVANT INTERNATIONAL

TELECOMMUNICATION UNION (ITU)/T ELECOM

ENGINEERING CENTER (TEC)

STANDARDS .

FDI limit to be increased from the present cap of 49% to 74% and the same

has been done.

Investments by FIIs to be exempt from the sect oral limit imposed on FDI.
There are a few other market barriers for entry into the Indian mobile services
market, such as:
-

High import duty on hand sets and infrastructure import ranging between 20-

40 percent
-

Huge entry/license fees

Lack of adequate spectrum for expansion of wireless services

Lack of coherent policy on spectrum management and allocation.

Upcoming Trade Shows in the Telecom sector

THE

TELECOM SECTOR HIGHLY CAPITAL - INTENSIVE AND REQUIRES HUGE

INVESTMENTS OVER A PROLONGED PERIOD OF TIME .

AND OVERSEAS INVESTORS WANT:

91

SEVERAL

DOMESTIC OPERATORS

6. RESEARCH OBJECTIVE
Marketing research is a systematic collection, analysis, interpretation and reporting
marketing managers to solve some marketing opportunities. This particular research
study was undertaken and design with some predetermined objectives. The main
objective of the study is to evaluate the Penetrate the Market for BSNL.

The objectives of the research are:

To know about the popularity of BSNL plan among the consumers in India
To know about the brands of GSM and their market capitalization.
To study about the competitive strength of BSNL.
To know about the consumers preferences and expectations with regard to
the choice of GSM SIM for various plan of BSNL
To motivate the dormant retailers for continuing trade with BSNL
To create awareness in dormant retailers about benefits which offered by
BSNL to small retailers directly or indirectly?
To know about the visibility of nearest competitors or rivals of BSNL in the
Rajasthan market.

92

7. RESEARCH METHODOLOGY

Research methodology is the way to systematically solve the research problem. It

may be understand as a science of studying how research is done scientifically. In it
I study the various steps that are generally adopted by a researcher in his research
problem along with the logic behind them. It is necessary for the researcher to know
not only the research method but also the methodology.
I not only talk off research method but also consider the logic behind the methods.
The use in conduct of my research study and explain why I am using a particular
matter for technique and why I am using others. So those research results are
capable for being well evaluated by others.

7.1 Research Design:

Research design is the arrangement of conditions for collection & analysis in
a manner that aims to combine relevance to the research purpose with
economy in procedure.
7.2 Research Instruments: A complete questionnaire is prepared on the basis of consumer behavior &
satisfaction with regard to radial tires.
The questionnaire was designed keeping the following point / question in mind:
Is the question required?
Has the respondent experienced the situation described in the question?

93

Is the question testing the respondents memory?

Is the respondent likely to remember such information?
Will the respondent part with the information voluntary?
Can a single question be fragmented into small but multiple questions for better
understanding?
7.3 Sampling Plan: a) Sample method: Non-probability sampling (random & stratified)
Sample Size: 20 colleges & 200 dormant retailers of handsets in prepaid sales.
There are near about 225 educational institutions in Raipur including all technical
and professional institutions. So for 1st project I select 20 colleges including boys
and girls colleges, technical and non-technical colleges, professional and non
professional institutions. Hence in this project sample size is around one fourth of
population size. In the 2nd project we cannot go with sampling. We just collect
information about dormant retailers and ask question accordingly questionnaire.
A definite plan was drawn up for obtaining a sample from different areas of
educational institute of Jaipur.and sawaimadhopur

Thus sample size has been

determined using a particular method. The availability of resources in terms of

infrastructure of field force. Time and cost was also taken into account.
Sampling Frame: - The sampling frame is the whole population since is based
on the selling behavior of all units presents in the population that is the
targeted to all the units in the population.
The process involved breaking up the various types educational institute of Jaipur
& Sawaimahdhopur city. This division was made in such a way that each one major

94

area of education get place in the study, be it technical or professional or other area
of study. There by each of these areas of study sample were drawn randomly or by
stratified sampling.
b) Sample Design: A sample design is a definite plan for obtaining technique or procedure. The
researcher would adopt in selecting items for the sample.
7.4 Types of sample design: Random sampling: - In random sampling, each of the population has a definite
reassigned probability of being selected in the sample.
Stratified sampling: - Under stratified sampling the population is divided into several
sub population (strata) that are individually more homogeneous than the total
population & then select items from each stratum to constitute a sample.
7.5 Data collection: Since the study, undertaken by me is descriptive research, I have
concentrated on primary data through survey and collection secondary data.
7.6 Source of data collection:
Data is collected from two methods: a) Primary data: b) The questionnaire for data collection according to the information required from
the consumers was designed. The region undertaken for the research is Jaipur
Sawaimadhopur (Raj.). Different areas selected for collection of data through
questionnaire and interviews.
b) Secondary data: - Secondary data is collected from books, newspaper,
magazine and websites.

95

8. COMPARATIVE SWOT ANALYSIS

Structural changes have had a positive impact on the telecommunications sector
and a compound annual growth rate (CAGR) of 13.42 percent is estimated for 20022006. The future of the industry lies in the mainline and cellular segments and
constant technological innovations such as Internet Protocol (IP) based services.
The telecom sector in India has been witnessing a continuous process of reforms
since 1991. With the opening of international long distance services and internet
telephony from April, 2002, the process of liberalization and opening up the sector
for competition is complete. Convergence of services is a major new emerging area
and the telecom sector will have to address this in the Tenth Plan.
BSNL is a major player in the rapidly growing Indian wireless market, as well as an
emerging leader among GSM operators worldwide.
8.1 How to Perform a Swat Analysis
A SWOT Analysis is an integral part of a marketing plan and can also be part of a
business plan. Knowing what a SWOT Analysis is and how to perform one is very
important.
8.2 What is a SWOT Analysis?
A SWOT (Strengths, Weaknesses, Opportunities, and Threats) is a tool used to
provide a general or detailed snapshot of a company's health. A SWOT analysis
stands for Strengths, Weaknesses, Opportunities, and Threats and is a simple and
powerful way to analyze your company's present marketing situation. The best way
to understand SWOT is to look at an actual example

8.3 Why use a SWOT Analysis?

In any business, it is imperative that the business be its own worst critic. A SWOT
analysis forces an objective analysis of a company's position vies a Vis its

96

competitors and the marketplace. Simultaneously, an effective SWOT analysis will

help determine in which areas a company is succeeding, allowing it to allocate
resources in such a way as to maintain any dominant positions it may have. Below
are numerous, current example SWOT analyses for sale.

a) Strengths
1. Knowledge. BSNL is ranked fastest growing company in Rajasthan state.
2. Relationship selling. We get to know our customers, one by one. Our direct
sales force maintains a relationship.
3. History. It has loyalty of customers and vendors. It is local.
4. The other company in telecom sector was merged different companies. But
BSNL did not take over any small telecom company. It establishes and
develop broad network on its own. It has 5, 58,510 mobile user till July, 2005.

b) Weaknesses
1. Company has a large physical network, so some times it is very difficult to
manage all this in an idle manner.
2. In comparison to strong competitors the visibility of BSNL is not satisfactory.

c) Opportunities
1. The financial strength of this is a backbone of India
2. Training. The company provides in-depth training to their employees and
frontline sales executives.
3. Service. As BSNL target market needs more service, the competitors are less
likely than ever to provide it. Their business model doesn't include service,
just selling.
4. The large number of population which have still do not have mobile could be
target customer of BSNL

97

5. The brand image of BSNL is strong plus point with BSNL so it is a great
opportunity in front of Reliance infocomm that they should avail this brand
image.
d) Threats
1. The strong competitors of BSNL Rim, Airtel just signed an agreement with
Nokia by which Airtel will increase its network across country.
2. Some companies like Idea planning to open its services in Rajasthan. So
coming time is going to be very tough and competitors.

9. Reactivation of Dormant Retailers

In todays business scenario retailers play a vital role in physical distribution channel
of every company. Retailers make a strong bond between customers and
organization. Todays retailers are becoming harder to please. They are smarter,
more demanding, less forgiving. The challenges are not to produce retailers chain.
The challenges are to retain the retailers.
It is not enough to attracting new retailers; the company must keep them and
increase their business. Too many companies suffer from high retailers defection. It
is like adding water to a leaking bucket.
There are some steps to reduce the defection rate. First, the company must define
and measure its retention rate. Second, the company must distinguish the cause of
retailers attrition and identify those that can be managed better. Third, the company
needs to estimate how much profit it loses when it loses retailers.
Unfortunately, most marketing theory and practices centers on the art of attracting
new retailers rather than on retaining and cultivating existing ones. The traditionally
has been on making sales rather than building good relationship between retailers
and company.
In this study I have cover ten zones of Jaipur & sawaimadhopur city and ask
question to small retailers according to questionnaire. All retailers came out with
different views and express why they stop trading with Direct sales associate i.e.

98

Advent Communication. Many of them still dealing in BSNL products but they
purchase from outside
Zone one covers Adarsh nagar, Jawahar nagar, Raja Park, Janta colony and
Transport nagar. Zone two covers Malviya nagar, Jagatpura and Bapu nagar. Zone
three covers Durgapura, Sanganer and Tonk road. Zone four covers Johri bazaar,
Brahmpuri, Amer and Ramganj. Zone five covers Mashesh nagar, Mansarover,
Aggarwal farm and new sanganer road. Zone six covers Ajmer road, Hasanpura,
Hawa sarak, Sodala and Vaishali nagar. Zone seven covers Bani park, Shastri
nagar and Station road. Zone eight covers Jhotwara, Kalwar road, Murlipura,
Harmada and Sikar road.

Zone nine consist C scheme, Jayanti market, Raiser plaza and M I road. Zone ten
covers Chandpole, Gangori bazaar, Kishanpole bazaar, Choura Rasta and
Chaugan stadium.
And in Sawaimadhopur Kherda, Bajriya, Adrsh Nagar , MP colony ,Mena colony,
P.G. college sawaimadhopur

and nearest village, So I have cover all above

mentioned area and find some surprisingly facts that some very very big retailers
create such kind of problem. Big players of market purchase BSNL products from
Advent communication and get additional benefits given by BSNL. And then they
give these sets to small retailers at cutting their own discount at lower price. In this
situation small retailers become sick due to price discrimination, lack of demand and
less margin and profit. So they either stop to sale BSNL products or switch over to
other place to purchase BSNL products.

99

Reasons
Other Reason
Focused on Core Business
Lack of Demand and Less Margin
Price Discrimination
Frequent Changes in Schemes
Services is not Up to the Mark

No of Retailer
5
10
12
9
13
7

Table: 1- Retailers List of Zone 1

REASONS FOR STOPPING TRADE OF ZONE 1

9%

13%

18%

23%

21%

16%
Other Reason

Focused on Core Business

Lack of Demand and Less Margin

Price Discrimination

Frequent Changes in Schemes

Services is not Up to the Mark

100

Table: 2- Retailers List of Zone 2

Zone 2
Reasons
No of Retailer
Other Reason
5
Focused on Core Business
4
Lack of Demand and Less Margin
10
Price Discrimination
14
Frequent Changes in Schemes
8
Services is not Up to the Mark
7

REASONS FOR STOPPING TRADE OF ZONE 2

15%

10%

8%

17%
21%
29%
Other Reason

Focused on Core Business

Lack of Demand and Less Margin

Price Discrimination

Frequent Changes in Schemes

Services is not Up to the Mark

Table: 3 Retailers list of Zone 3

Zone 3

101

Reasons
No of Retailer
Other Reason
5
Focused on Core Business
4
Lack of Demand and Less Margin
7
Price Discrimination
11
Frequent Changes in Schemes
6
Services is not Up to the Mark
5
REASONS FOR STOPPING TRADE OF ZONE 3

13%

13%
11%

16%

18%
29%

Other Reason

Focused on Core Business

Lack of Demand and Less Margin

Price Discrimination

Frequent Changes in Schemes

Services is not Up to the Mark

Table: 4 Retailers list of Zone 4

Zone 4
Reasons
No of Retailer
Other Reason
8
Focused on Core Business
3
Lack of Demand and Less Margin
12
Price Discrimination
14
Frequent Changes in Schemes
5
REASONS FOR STOPPING TRADE OF ZONE 4
Services is not Up to the Mark
9
18%

16%
6%

10%

24%

26%
Other Reason

102

Focused on Core Business

Lack of Demand and Less Margin

Price Discrimination

Frequent Changes in Schemes

Services is not Up to the Mark

Table: 5 Retailers list of Zone 5

Zone 5
Reasons
No of Retailer
Other Reason
78
Focused on Core Business
40
Lack of Demand and Less Margin
125
Price Discrimination
110
Frequent Changes in Schemes
49
Services is not Up to the Mark
66

REASONS FOR STOPPING TRADE OF ZONE 5

12%

16%
9%

Table: 6

5%

35%

23%

list of Zone

Retailers
6

Other Reason

Focused on Core Business

Lack of Demand and Less Margin

Price Discrimination

Frequent Changes in Schemes

is not Up to the Mark
ZoneServices
6

Reasons
Other Reason
Focused on Core Business
Lack of Demand and Less Margin
Price Discrimination
Frequent Changes in Schemes
Services is not Up to the Mark

No of Retailer
5
2
17
8
7
12

REASONS FOR STOPPING TRADE OF ZONE 6

10% 4%

24%

14%

32%
16%

103
Other Reason

Focused on Core Business

Lack of Demand and Less Margin

Price Discrimination

Frequent Changes in Schemes

Services is not Up to the Mark

Table: 7 Retailers list of Zone 7

Zone 7
Reasons
Other Reason
Focused on Core Business
Lack of Demand and Less Margin
Price Discrimination
Frequent Changes in Schemes
Services is not Up to the Mark

No of Retailer
11
10
9
10
5
8

REASONS FOR STOPPING TRADE OF ZONE 7

15%

21%

9%
19%

19%

17%

Other Reason

Focused on Core Business

Lack of Demand and Less Margin

Price Discrimination

Frequent Changes in Schemes

Services is not Up to the Mark

104

Table: 8 Retailers list of Zone 8

Zone 8
Zone 8
No of Retailer
Other Reason
15
Focused on Core Business
7
Lack of Demand and Less Margin
7
Price Discrimination
15
Frequent Changes in Schemes
4
Services is not Up to the Mark
6
REASONS FOR STOPPING TRADE OF ZONE 8

7%

11%

28%

28%
13%

13%

Other Reason

Focused on Core Business

Lack of Demand and Less Margin

Price Discrimination

Frequent Changes in Schemes

Services is not Up to the Mark

Table: 9 Retailers list of Zone 9

105

Zone 9
Reasons
No of Retailer
Other Reason
10
Focused on Core Business
5
Lack of Demand and Less Margin
8
Price Discrimination
15
Frequent Changes in Schemes
4
Services is not Up to the Mark
7
REASONS FOR STOPPING TRADE OF ZONE 9
14%

20%

8%
10%
32%

16%

Other Reason

Focused on Core Business

Lack of Demand and Less Margin

Price Discrimination

Frequent Changes in Schemes

Services is not Up to the Mark

Table: 10Retailers list of Zone 10

Zone 10
Reasons
Other Reason
Focused on Core Business
Lack of Demand and Less Margin
Price Discrimination
Frequent Changes in Schemes
Services is not Up to the Mark

No of Retailer
9
4
8
7
3
5

REASONS FOR STOPPING TRADE OF ZONE 10

14%

26%

8%

11%

19%
22%
Other Reason

106

Focused on Core Business

Lack of Demand and Less Margin

Price Discrimination

Frequent Changes in Schemes

Services is not Up to the Mark

Findings & conclusions

BSNL offered some attractive plans only for big player of the market, which
purchases the products in bulk so that small retailer of the market suffered
from lack of demand and other problems.
In almost ten zones above twenty per cent retailers express that price
discrimination is the basic cause to stop trade with of BSNL. Some big
retailers offered the same product at lower price. They directly or indirectly
entertain the benefits offered by company.
Almost twenty percent said that they focused on core business because its
negatively affecting their core business. So their overall sales decreased.
Frequent change in schemes also make uncomfortable to focused on core
business
Ten to fifteen per cent retailers are not satisfied with the services provided by
of BSNL. Particularly in area small retailers are not satisfied with salesman
services. Sometimes salesman did not give additional benefits offered by
company whereas some retailers demanded hoarding and other things.
Almost more than twenty five percent retailers are suffered from lack of
demand and less margin. If a same product available at cheaper rate at big
players shop then why they purchased from small shops. Price discrimination
is in the root of lack of demand.
Less than ten percent stop trade due to other reasons like some suffered
from financial problems, some opened a new business and some due to
familiar problems.

107

10. Suggestions
BSNL should also plane such kind of schemes, which are benefited to small
retailers. Big players of the market later on directly or indirectly affect the sale
and performance of company and direct sales associates.
BSNL can start a training and awareness programme for small retailers
.make sure that its salesman maintain its brand name and prestige of company.
Company should not change the schemes frequently because it creates
uncomfertability among small retailers.

11. Annexure
BSNL Sales Coverage in Education Institutions of
.

Jaipur. & Sawaimadhopur

1. Name of the College:

Courses Offered No. of Seats No. of Boys

108

No. of Girls

Localities Outsiders

ii
2. No. of Faculty Members:
\3. Hostel Facility:

a) Yes

b) No

If Yes,
No. Of Hostellers

No. Of Boys

4. Canteen: a) Yes

No. Of Girls

b) No

a) Telecom Operator Available.

BSNL

RIM

Airtel

Hutch

Tata-indicom

b) Can we place BSNL stocks?

Yes

No

If Yes, Contact Person: _____

Tel. No.:

_______________

5. Nearest Telecom Retailers:

Name: 1_________________________________2__________________________
Address:
Tel. No.:
Distance from college:
6. Nearby Markets: l.________________
2.________________
7. A) Visibility of BSNL

109

Distance

Excellent

Good

Average

Bad

8. A) Availability of Other Operators:

Airtel

Vodaphon

Rim Tata-inadicom

b) Visibility of Other Operators:

Airtel

Vodaphon

RIM

Tata-inadicom

9. Remarks: ________________________________
_________________________
RETAILERS RETENTION

1. Name of the Retailers

-----------------------------------------------------

2. Address

--------------------------------------------------------------

3. Zone No.

--------------------------------------------------------------

4. Still Deal in pro BSNL ducts

6. Total sales / monthly

: SIM

7. Total sales of BSNL

: SIM

(Y/N)

110

12. BIBLIOGRAPHY
Books:

Agrawal M.R., Finacial Management, Garima Publication, Second

Edition 2010 .

Avadhani V.A., Securities Analiysis and Portfolio Management,

Himalaya Publishing House, Ninth Edition 2008.

Chunawala S.A., Financial Management, Himalaya Publishing House,

Second Edition 2008.

Gordon , Natarajan ,Managementof financial services ,Himalaya

Publish House,Fifth Edition 2006.

111

Gupta V.k., Marketing of Financial Services, Mohit Publication, Third

Edition 2004.

Kothari C.R, Research Methodology, New Age International Publisher,

Second Edition 2004.

Kotler Philip, Keller Kelvin Lane, Marketing Management, New Delhi,

Published by Dorling Kindersley (India) Pvt. Ltd, Second Edition 2006.

Max Manfred Bengamin, Method Research, Sanga Publication, New

Edition.

Magazines & Publications:

1. Economics and Business Facts for you (Jan 2009)
2. India page of HT paper (Dec. 27,2009)

3. The Business world (Feb 2009)

Websites:

1. http://www.slideshare.net/nusantara99/marketing-mnagement
2. http://en.wikipedia.org/wiki/Bharti_Airtel
3. http://www.financialexpress.com/news/airtel_brand_promotion_in_india

4. www.bsnl.co.in
5. www.punjab.bsnl.co.in/directoryofofficers.php

112

113