Why does this surprise the telecom industry?
Well, today BSNL is a shadow of what it was in May 2007 when A Raja was appointed as communications minister. At that time, BSNL had 31.6 million subscribers out of a total 177.8 million subscribers accounting for a subscriber market share of 17.76%. Then BSNL had marginally more subscribers than both Reliance Infocomm and Hutchison Essar (now Vodafone Essar). Today BSNL has 71.7 million subscribers and accounts for a market share of just 11.6%. It is number four after Bharti Airtel, Reliance Communications and Vodafone Essar. Ironically, the three private players seem to have retained their market share.
The slow growth in subscriber base was largely due to a shortage of capacity in the network. This happened primarily due to the policies followed by the communications ministry led by Raja. Soon after Raja became minister in May 2007, among the first things that he did was start re-negotiating the 45 million lines GSM tender of BSNL that was placed when Dayanidhi Maran was minister.
While Raja did manage to get a lowering in prices, the tender size was halved to 22.5 million. Then in April 2008, another tender of 93 million GSM lines was floated. This was the biggest order ever in the history of telecommunications. However, in 2010, a committee headed by Sam Pitroda, advisor to the Prime Minister has asked BSNL to scrap the tender.
So, it seems quite surprising that a man who literally rang the death knell for BSNL is now pleading with finance minister Pranab Mukherjee to give it a lease of life.Is there more than meets the eye? Or is there some truth in the rumours of an impending Cabinet reshuffle?
