BSNL will make profits in 2018, if we play our cards right: Anupam Shrivastava

By Ibrahim Ahmad & Krishna Mukherjee

Just little over three months into his job, Anupam Shrivastava, CMD, BSNL, has got the mammoth task of reviving BSNL, whose salary bill runs into thousand of crores and which has been incurring losses on a streak. He is leaving no stone unturned to bring back the PSU telco into the pink of health. Besides, changing the traditional mindset about BSNL--he has gone far to tie up with its peers and has come out with strategies like ‘cooperative-competition’. In an interview with Voice&Data, he tells us the roadmap for turning around the company by 2018 and how wi-fi is going to be the game-changer.

Voice&Data : After you assumed charge as BSNL’s CMD, what type of steps have been taken in order to revive the company?

Anupam Shrivastava: Times are interesting as well as challenging so let’s begin with what has happened in the past and then will come to the initiatives. You might be aware that in 2002, we started our mobile services and we were getting sufficient amount of equipment and capacity and started growing at a very fast rate. And by the time it was 2006, we were almost no. 1 operator in India.

The penetration of mobile services were also not much at that point of time and the industry was progressing at a very fast pace but sometime around 2007 there were some problems with BSNL in the sense--we could not get sufficient equipment, there were problems with our procurement, there were issues with our tenders and as a result from 2007 onwards till 2012 we could not add any equipment to our network and that was the point when we suffered a lot and we missed the bus, which was going at a very fast pace.

The whole industry took advantage of it and mobile penetration, which was around 38% during those days grew to almost 80%. So, the market was captured by other operators and we couldn’t. In urban areas, the penetration touched almost 140% and in rural areas it was around 40-45%, so on an average it was about 90%. I believe that was the root cause of whatever has happened to BSNL. From almost like no1 or 2 operator in 2006, we started going down and today we are at no 4 and having only 10% of the market share.

This was the situation when I took the charge. But now, by putting the past behind us, we realized that the era of voice is over and it is now the revolution of data which is going to happen in a big way. So we analysed our strengths and opportunities and found that in order to offer data communication and capture the data market, BSNL by far is the best placed operator at this point of time given the huge assets we have as far as optical fibre is concerned, copper cable is concerned, customer fixed access is concerned. All these we want to utilize and want to exploit so that data services could be given.

This is the time when convergence is taking place and our main focus is now going to be on developing BSNL as the data services company. So, we have to play our cards well, we have to put our best foot forward to emerge as the leading data services provider.

Voice&Data: You mentioned that there were problems in the past with regards to procurement, tenders, etc. So, how would you ensure that the past problems do not crop up again?

Anupam Shrivastava: We have to look from the overall perspective of what is happening in the country today. In the past, there were some problems but let’s not talk about such problems...Now you can see that everybody is talking about digital India, smart cities, etc and at least some talks are going on, some directions are there and so with that the right environment is building up.

Secondly, we are moving away from the traditional procurement processes and are also relying on opex model. We are distributing our tenders and EoIs (Expression of Interest) into two different areas.
One is, we are going to invest only when it is absolutely necessary, rest we are going to have opex model and then we would like to share our infrastructure with other operators who have already rolled out their networks. So, cooperative-competition is going to be one of our strategies. Wherever, it would be necessary to cooperate, we will cooperate with our peers.

Traditionally, our legacy mindset was that we were only focussing on whatever was available to us but now we are looking beyond that and sharing our networks so that customer gets good services.
We have also come up with our strategy of utilizing our infrastructure, we are sitting on a huge wealth of infrastructure we have got factories, tower assets, and these all assets were built over the years but now we want to monetize them.

We have already formed a subsidiary company as far as tower infrastructure is concerned. Slowly, our factory assets will be used for manufacturing and they will get dovetailed with government’s ‘Make in India policy’--so we say ‘Make in India’ is the policy of the government and ‘Make in BSNL’ is our sub policy.

Voice&Data: Which would be your key focus areas in making BSNL, one of the top data services company?

Anupam Shrivastava: Wi-fi is one area which is going to benefit BSNL. Let me explain. We do not have 4G license, but we have the landline assets. Wi-fi is one area which we can utilize to give competition to 4G players because wi-fi is a 4G technology, it is even a 5G technology and integrating the wi-fi hotspots with our mobile networks is going to be the game changer.

The moment the customer comes from 3G networks to our wi-fi hotspot, the transition is going to be seamless, there would be no break in the data session so 3G will be all pervasive network of BSNL. When you go outside you will be supported by 3G network that also goes up to 42 mbps speed. Once you come to our hotspot, the speed will be as high as 300 mbps almost higher than 4G speed which other operators will be offering. So, in a nutshell--we know our limitations, we know our strengths and we would like to cash on these opportunities.

Voice&Data: But how are you going to change the traditional mindset inside BSNL?

Anupam Shrivastava: As far as our mindset is concerned, specially regarding customer service, we are working around these areas. As I mentioned, we have got a subsidiary company for tower sharing sometime back, but our legacy mindset actually used to oppose it and we were not interested to share our network with the private operators.

The legacy mindset was of the view that if we share our network a private person will come and start ruling us. Actually, this is not the case. Competition from private players is anyhow coming but by sharing the infrastructure it can pay us something and both can progress like this. So, that mindset of doing business is improving and people are aligned with that.

At the same time, it’s very difficult to change the legacy mindset overnight. For that, we are going for certain outsourcing models. We have outsourced the call service network, franchisee network, dealer network. So, the face of BSNL which would be interacting with the customers will be in the form of outsourcing models.

Voice&Data: As the voice revolution moves towards data revolution, what type of transitions can be seen in this new era of data?

Anupam Shrivastava: Data services are seen in two ways –one is companies which are providing the data pipes which are mostly the TSPs and secondly, companies which are OTT players who actually utilises that data and converts it into commercial value. Traditionally, the companies which are getting data pipes don’t get the whole share of revenue which is coming from the customers. It is believed that the OTT players are utilising the infrastructure and the TSPs are left with the data pipes only .

Anyway, our regulatory authority is looking into this aspect. We are also trying to have that capability wherein we can now interact with OTT players and offer them something which would be a win-win situation for both of us.

At this point of time, we want to emerge as the robust data service carrier so the first thing we have to ensure is that the data flowing into the pipes should be seamless, and the importance of taking the packets from one node to another node in time is also very important.

Voice&Data: That means, BSNL will be collaborating with OTT players...
Anupam Shrivastava : Absolutely with OTTs and peers also. But when it comes to giving competition to our peers as per tariffs are concerned, customer acquisitions are concerned, we will be very serious on that and not compromise on anything.

Voice&Data: How is wi-fi going to be the real game changer?

Anupam Shrivastava: In south and west, we have already identified a company that will be rolling out wi-fi hotspots. In the north and east, EoIs are out and soon the wi-fi hotspots will be rolled out. Apart from that, we have also identified locations which are important from tourists’ perspective. We are putting up our network there and first wi-fi hotspot was rolled out in Varanasi this year itself.

Success of all these depends on our data flow. Our MPLS network, optical fiber network all these need to be strengthened so we are already in the process of having OTN network and upgrading our routers in the core network so everything is taking place simultaneously.

Initially, we are thinking of putting in 2,500 wi-fi hotspots next year and at least we will be covering 25 cities and it can cross 50 also. But at the same time, we believe putting in wi-fi hotspots will not help much as it is important to integrate the wi-fi hotspots with our mobile network and that’s the key for a successful wi-fi mechanism.

Voice&Data: How much investment you have planned for all these?

Anupam Shrivastava: Our capex planning is almost Rs 39,000 crore, out of which the maximum chunk would go into the core network and wi-fi. Almost Rs 4,800 crore would be invested in upgrading the mobile networks, which is phase 7 of our network and the time-frame for the same is also five years from now.
So, we intend to be in positive or in profit from 2018-19 onwards and the results we are going to see from next year itself. As the data flow will increase, customer will start coming to us, our topline would be improved. It’s all about how fast we improve our topline.

Voice&Data: Airtel’s managed services model was one of the success stories in the industry. How does BSNL view such models?

Anupam Shrivastava: As we are aware, Airtel is one of the success stories in managed services model. I think nowhere in the world managed service model had received that much success. In fact, it became a case study in some of the leading institutions.

The point here is other operators too tried to experiment with such model but did not get that much success so it all depends on the trend of the industry. So, when this model succeeded with Airtel, the phase of the industry was expansion phase of voice and that is why it sustained and was successful. Once the maturity phase came in, the model was not that successful and that’s why they withdrew from the managed services.

Currently, managed services model or outsourced models are not the area any operator is focussing on. In the wi-fi hotspots that we are putting up, it’s a kind of managed services model, as you are aware wi-fi hotspots are being put up by a private person on a revenue sharing basis. We can thus say we are using managed services in a different way.

Voice&Data: BSNL also faces serious revenue leakage. What steps are you taking to get rid of that?
Anupam Shrivastava: Revenue leakage was taking place in two ways—sometimes our towers, exchanges were tampered with in order to benefit other operators. It may be true or may not be you never know...We have already told our staff to keep a watch on that and they keep a tab on the number of base stations which are working and which are going down. We have this ‘pinging mechanism’ with that we can ping all our nodes on an almost hourly basis. By this mechanism we would come to know about the working of any BTS towers exchanges and then we keep a tab on such attempts. Secondly, we are tasking our finance people to keep a tab on revenue realization so that a certain percentage is met. We are working seriously on the targets set by us.

Voice&Data: Because of the hue and cry over radiation from towers, mobile networks are impacted. How do you see the future in such a scenario?

Anupam Shrivastava: Unfortunately, the perception that grew in our society is that radiation from towers is hazardous although there are no such studies to prove it. In the west, certain standard norms are followed and here we have 10 times stricter norms compared to the US, and European countries.

We are suffering because of this perception like any other telecom operator, which we believe is not good. People are a little reluctant to have towers at their roof tops. But at the same time, I believe this perception will slowly vanish as people start realising that towers do not cause any harm. Even the WHO has not come up with a conclusive report that says such towers are hazardous so we believe it’s just a phase in our society and people will soon realize that this is not an area to worry about.

Voice&Data: There’s lot of buzz around Internet of Things and M2M. What exactly BSNL is doing around them?

Anupam Shrivastava: For M2M communication, we are almost ready with the policy papers and we see lot of business opportunities there. We are also part of the body which will be suggesting the Government of India how to go about it. The government is already talking about smart cities, where M2M will play a very important role and then connected to it is m-governance and it is also the area where we have already gone into. We have identified system integrators who will bringing us business. It’s at a nascent stage but yes potential is huge.
Under M2M, we have come up with 15-16 projects country wide—where we are providing M2M communication for the electricity department, disaster recovery departments, weather data collection, etc.

Right now, enterprise businesses are currently been taken care of by an independent director and a lot of focus has been given to it. The contribution from enterprise businesses at this point of time is 10% and we want to raise it to 20-20% in the next two-three years through M2M, m-governance and they will be the key drivers for enterprise businesses. In a way, we are moving away from the traditional business of lease line and stuff like that.

Voice&Data: What’s current status of NoFN project?

Anupam Shrivastava: Under NOFN, 70% rolling out of optical fiber to the gram panchayats level is with BSNL and the rest is with Railtel and PGCIL. NOFN by this March 31, has covered 20, 000 panchayats. When we started this project, there were some problems but now we are in full swing and laying almost 2,500 km of fiber on weekly basis. We have the problem of PLB pipes for which we have installed 24 units of PLB pipe manufacturing facilities in the seven factories. Here, private players have also installed machines and are producing the PLB so the shortage of such pipes has been addressed. We are going at a fullest possible speed you can say that the accelerator is pushed to the floor.

Further, we believe we are the best player to utilize the fiber further and extend those services to the people in general.

Voice&Data: What are your plans for providing last mile connectivity?

Anupam Shrivastava: For the last mile connectivity, we are tieing up with the cable operators as they are already there in that domain and realising that we have done proof-of concept with one of the cable operators. We have come up with EoIs, where we are inviting the cable operators to come to us and have revenue sharing mechanism where we will roll out broadband to the customer premises.

Voice&Data: What’s your vision for BSNL two years down the line?

Anupam Shrivastava: The first and foremost vision is to make the P&L sheet profitable. No more we should be a company incurring losses. We should be seen as a company giving profits to the government of India. We want to see this vision happen, but some of our numbers, like our salary bills of Rs 15,000 crore, is mind boggling. We are looking at the topline of Rs 45,000-48000 crore that means growth of Rs 20,000 crore, and then only we can reach to a level where we can say BSNL is not running in losses, but generating profits. The task is huge, and telecom business and it is very unpredictable.

When the mobile service took off, it was happening at such a fast pace that no matter what was happening in the environment, every firm was making profit. The data services is taking off, and if we play our cards right then we have a ray of hope and we can see 2018 -19 as the year of profits. Keep in mind that we have the least amount of debts as compared to other operators.