Bharat Sanchar Nigam Ltd. formed on 1st October „2000, is one of the largest & leading public sector units providing comprehensive range of telecom services in India. They operate under 13 different brands. Their customer base as on July 31, 2011 was at 95.14 Million.
BSNL has an installed Network in the country comprising about 43.74 million line basic telephone capacity, 8.83 million WLL capacity, 72.60 million GSM capacity, 37,885 fixed exchanges, 68,162 GSM BTSs, 12,071 CDMA Towers, 197 Satellite Stations, 6,86,644 RKm. of OFC, 50,430 RKm. of microwave network connecting 623 districts, 7330 cities/towns & 5.8 lakhs villages. However, with such a large base, excellent brand recall, political backing and huge workforce, the company has not been doing well and in fact has reported a loss in the previous financial year. BSNL had reported the highest net profit of over Rs10,000 crore in 2005-06 but since then its profits have been falling. The losses have more than tripled to about Rs. 6,000 crores during 2010-11 mainly due to hefty outgo for employees' salary and expenses borne by the PSU for procuring 3G and BWA spectrum. The company had registered a net loss of Rs. 1,823 crores during 2009-10. The total revenues of the company also declined to Rs 28,876 crore during the current year, down nearly 10% from Rs 32,072 crore in the previous financial year. Recipient of the Golden Eagle award in 2004 & 2005 for the most trusted brand in telecom sector, BSNL is today struggling to retain its identity. This article aims are preparing a competitive strategy for BSNL and select suitable competitive portfolio so that the company can emerge out of the crisis it is in.
Further, the change management strategy that has to be adopted in order to implement the changes in the organisation is given in this section.
1. Competitive Strategy and suitable corporate portfolio: Before we embark upon suggesting a suitable corporate portfolio, it is important to analyse the current the functioning and management of BSNL. a) No doubt that its presence and reach across the country is its biggest strength. Established offices in all the metros, A, B & C class cities, and installations and offices in the remotest parts of the nation, especially J&K, North East is a strength they can easily exploit on their road to recovery. b) Long serving employees and excellent knowledge of the market, customers, tacit knowledge base of BSNL is unique. They are different from the competition since customers view BSNL as a 2|Page
state run firm and profit not being the only motive, would be willing to trust them more than other competitors. c) Even today, they rule the land line connections and command a market share of over 65% of the customer base and any of the revival and restructuring plans for BSNL has to pass through this channel. d) BSNL, being a completely government owned organisation, they can use their political affiliations to change the rules of the market, create entry barriers for competition, and lobby for influencing the market to leverage their strengths, policies that give them an edge, and those which do not violate TRAI and other fair trade practices, can be adopted. While we discuss the selection of suitable portfolio from the competitive strategies, apart from the strengths of BSNL highlighted above, it is important that the crucial questions of what can be done that is not being done at BSNL is pondered. Some of the questions that we have to ask and find answers that hold key to developing a competitive strategy and designing a suitable portfolio are: 1. BSNL has a vision ‘To become the largest Telecom Service provider in South East Asia’. For this it is important to understand the parameter for being the largest. Is it revenue, Av. Revenue per User, profit, subscribers, Network (no of exchanges, BTS etc)? Clarity in purpose...