Wednesday, August 4, 2010

BSNL's DownFall

Most of the bestseller in business category invariantly portray stories of a successful enterprise.Rarely we look into failures deeply to ascertain why it failed.In this blog i would go through my personal experience with BSNL and a comparison of financial performance BSNL & Airtel and checkout what lies in future for them.

I used to have a broadband connection with BSNL in home town ( Palayamkottai ) which i used for work from home and it used to work fairly well. Last month when i was there i faced a peculiar problem.Connection came up but it went down every 2 minutes and a new ip got negotiated and this process continued endlessly.There were no issues in making calls though. I called up customer care to fix the issue after giving detailed description of the issue .For the next two days they used to call up once in a day and check if the issue is solved.How the hell will it go off when no fix was done ? When i replied in negative ,on the 3rd day they sent a person to check for any line fault. If there is any line fault how could i could i make phone calls. That smart guy checked the line (made a call from my landline to his office ) and made a great discovery ie) the line was proper. Couldnt he done this sitting from his office itself ?. He left saying that a internet specialist(!?!?!) will attend my line. After waiting desperately for 2 more days i decided to get rid of the connection. All through this episode i was in a opinion that my connection alone was at fault and BSNL was not able to rectify it.But recently when i visited my native i had to access internet in my uncle's home and to my suprise i found that the same problem is there too.It means a vast no of connections were affected by this issue it was not solved for a month atleast.Tragic isnt it.

From Prem's

Having closed my landline broadband connection i was looking for wireless service with broadband speed and BSNL 3G was the only service which can be used both in my native and in Banglore.So i decided to take up a BSNL data card . இவ்வளோ அடி பட்டும் உனக்கு அறிவு வரலையான்னு நீங்க கேக்குறது புரியுது .When i checked that out, it was mentioned that they were out of stock and it would arrive soon !!! And this reply continued for 2 weeks ( what a consistancy).After heavy recomendation from insiders ( my aunt is working there) i was given a insider information that a small batch of cards( 30 nos) would arrive on a particular day.On that evenful day after waiting for 2 hours i could finally get it.I remember that this was the case with BSNL sim 4-5 years back. It was sold in black market
due to improper management of stock and now its pushed to 6th position in 2G segment. Probably the same is going to happen in 3G and broadband segment too.

This incident made me look into the financial performance of BSNL . Though i have read articles that its getting worser, since its not in listed space we couldnt get detailed info on that. I tried to compare the financial performance of BSNL & Airtel and difference in performance was quite startling. Between 2005 to 2010 BSNL's profit diminished from 10,000 Crs to -1,823 Crs ( ie loss ). Remember that this is the golden era for Indian telecom industry where we customer base increased from few crores to 50 Crores.In Contrast Airtel's profit grew from 3,832 Crs(2006) to 14,767 Crs(2010).No prizes for guessing the reason . BSNL is digging on its heels by arrogant customer care. This is inspite of paying their employes almost 10 times than Airtel.

What lies in the Future
Even though BSNL has started making loss , its cushioned by the huge cash reserves accumulated over the years before it had to compete with private telecom players. This reserves would help them to postpone but not avoid facing the chaos of bankrupty. BSNL was given 3G spectrum well ahead of others but it was not able to capitalize on this monopolistic opportunity too .3G penetration is dismal . Last year their best performace came from the broadband area and it was due to the monoploy it enjoys till now.But its honeymoon will end soon when private players start rolling out 3G and Broadband wireless plans later this year.Deep pocketed players such as Reliance entering BWA sector will put the final nail in their coffin if they fail to make a turnaround in their behavior. Lets hope something miracle happens so that BSNL doesnt turn into next AirIndia.


  1. Nice analysis..Yeah, even i use bsnl isnt very good..

  2. BSNL is sick to the core now a days..I am facing the same problem for last 1 month in Shanthinagar too....Exactly same steps are taken similar to yours to resolve the issue...Its still in progress...To the extent they disconnected the telephone line Since I am bugging them by calling up JE always :)...Suggest me anyother plans as its very difficult 2 work form native nw a days...

  3. @Muthu
    Might be AitelLandline if you concerned about quality . Wait for 3 more months , there will be flurry of quality options at dead cheap rates