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State-owned BSNL behind private telecom firms in rural, urban markets

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State-owned BSNL behind private telecom firms in rural, urban markets

In March 2020, BSNL had a rural market share of over 7% with a subscriber base of 37 million; Jio and Airtel had a market share of nearly 34% each during the same period

The government approved the third revival package of Rs 89,000 crore for BSNL last week. It said that this package will help the state-owned firm to emerge as a stable telecom service provider and it can focus on providing connectivity to the remotest parts of India.

It implied that the company’s services are critical in far-flung rural areas which are not served by private players as they are guided by profit motive. However, data shows that private operators such as Reliance Jio, Bharti Airtel, and Vodafone Idea are not only providing services in all rural corners, but their rural market share is also higher than BSNL’s.

Currently, out of the total 1.143 billion mobile subscribers in the country, 45 per cent or over 516 million are rural subscribers. In the rural areas, BSNL has a market share of 6.3 per cent with a rural subscriber base of 32.52 million as of March-end, according to data by the Telecom Regulatory Authority of India (Trai), according to a report in the Financial Express.

In comparison, Jio has a market share of 36.5 per cent with a subscriber base of 188.7 million, followed by Bharti Airtel at 34.8 per cent and nearly 180 million subscribers, and Vodafone Idea at 22.3 per cent with a subscriber base of 115 million.

BSNL is lagging behind peers in rural areas because of increased focus of private companies in such areas, lack of capex by BSNL to strengthen services, stagnant subscriber base, and absence of 4G and 5G services by BSNL.

Ashwini Vaishnaw, communication minister, said, “Now the time has come when BSNL should be in the league of the major players and is able to bring connectivity to places where normal commercial consideration companies will not be able to go.”

In March 2020, BSNL had a rural market share of over seven per cent with a subscriber base of about 37 million. Meanwhile, both Jio and Airtel had a similar rural market share of nearly 34 per cent each in March 2022 with a subscriber base of 176 million, and 174 million, respectively.

Despite the previous two support packages worth over Rs 2.3 trillion, BSNL has failed to capture rural subscribers lost by Vodafone Idea, which had 131 million subscribers in March 2022 with a market share of 25 per cent.

P K Purwar, chairman and managing director, BSNL, said, “With support from the government, BSNL has a strong focus on rural areas to provide services at competitive rates. The focus of the company currently is to grow its FTTH (fibre-to-the-home) and enterprise business. In about six months, there will be a greater focus on the mobile services segment once we start deploying the 4G networks.”

Currently, about 40,000 villages in India do not have 4G connectivity.

Devusinh Chauhan, minister of state for communications, said that the government is targeting to complete 4G saturation by 2024.
While Jio has captured a strong share in rural areas with its free internet offers since 2016, Airtel is eyeing 60,000 high-potential villages where it is not present.

Gopal Vittal, Airtel CEO, said that out of the 60,000 villages, the company has identified 40,000 high-potential villages to focus on profitability.
Further, with 5G rollout, both Airtel and Jio are looking to take a stronghold over the rural areas as well, focusing on quality customers.

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