J.S. Deepak, a government nominee on the board of public sector telecom operator BSNL has said the company was inflating its subscriber base, according to a report in Business Line. According to Deepak, who is Joint Secretary (Telecom) in India’s Department of Telecommunications (DoT), 28.73 percent of the companys mobile network capacity was lying unutilized. This has reportedly been indicated in a note to the DoT, a copy of which MediaNama wasn’t able to find on the DoT website.
Yet again, there’s a question mark on India’s telecom connection additions, which exceed 10 million per month on a regular basis. Rumors of privately owned telecom operators artificially inflating their subscriber base have been around for a while: the higher the base and the growth in the market, the greater the propensity for increased valuations, as well as allocation of numbers. But why would BSNL show an artificially high subscriber base? Do read: The Benefits Of Over-reporting Indian Mobile Subscribers Numbers.
One also wonders why the Telecom Regulator or the DoT don’t independently verify numbers submitted to them by telecom operators. At least the DoT should, before allocating new numbers. There doesn’t appear to be a standard policy for when a customer is believed to have left a particular network. You can switch telcos, but be counted twice if the previous operator still continues to keep you on board. According to the note, Deepak has said that BSNL extended the grace period to 180 days from 35 days. In India, the churn figure is around 8-10% of a telcos subscriber base.
Fixed Line, Broadband Woes
Meanwhile, BSNL, which is also the largest ISP in India, appears to be struggling financially with its fixed line and broadband business. According to a statement released to the Lok Sabha, BSNLs “Non-Cellular” segment reported a staggering loss of Rs. 49.63 billion for the fiscal. Keep in mind that as a public sector undertaking, BSNL may be required to take on certain unprofitable initiatives, such as expansion of the telephony network in rural areas.
— MTNL’s Net Loss At Rs.8.95B, Wireless Revenues Down 22%, Landline Down 24.8%
— Jan 2010: India Crosses 8M Broadband Connections; Adds 19.90 M Wireless
— The Benefits Of Over-reporting Indian Mobile Subscribers Numbers.
— MTNL Official Telecom Provider For Commonwealth Games 2010