INTRODUCTION

Bharat Sanchar Nigam Ltd (BSNL), the corporate version of erstwhile DOT, came to existence on
1st October 2000. Ever since the formation of BSNL, the Indian telecommunications scenario has been
transforming itself into a multi-player, multi-product market with varied market sizes and segments.
Within the basic phone service the value chain has split into Basic services, long distance players, and
international long distance players.

BSNL’s POSITIONING IN TELECOM INDUSTRY

To understand and suggest – how strategic management can help BSNL – the first thing
is to understand the Telecom industry environment and the stakeholders involved. Apart from
having to cope with the change in structure and culture (government to corporate), BSNL has
had to gear itself to meet competition in various segments – basic services, long distance (LD),
and International Long Distance (ILD), and Internet Service Provision (ISP), and Mobile
services. With the advent of competition the private operators have been impacting the
strategic matrix by influencing regulatory bodies, adopting intelligent media strategies, and by
targeting the creamy layer of customers. While, political control over the public sector remains
a contentious strategic issue in the country; with the formation of a company, the internal
strategy of the BSNL board will be of gaining considerable autonomy. Labour unions are
powerful internal stakeholders, as are the middle managers/ other staff that have the primary
responsibility for customer care. The following stakeholders diagram gives an insight about
the changing telecom industry environment for BSNL

BSNL’s SWOT ANALYSIS

Environment BSNL definitely requires to redefine its strategies. What is required is to identify the
potential opportunities and threats implied by this changing environment for the BSNL. In changing
trends, situations, and events gaining an accurate understanding of BSNL’s strengths and limitations will
help in better strategic management of organization. The SWOT analysis for BSNL is as follows –
 BSNL – SWOT ANALYSIS
STRENTHS
 Pan-India reach
 Experienced telecom service provider
 Total telecom service provider
 Huge Resources (financial & technical pool)
 Huge customer base
 Most trusted telecom brand
 Transparency in billing
 Easy deployment of new services
 Copper in last mile can be used for easy
broadband deployment
 Huge Optical Fibre network and associated
bandwidth
OPPORTUNITIES
 Tremendous market growing at 20 lac
customers per month
 Untapped broadband services
 Untouched international market
 Can capitalize on public sector image to grab
government’s ICT initiatives
 Diversification of business to turn-key projects
 Leveraging the brand image to source funds
 Almost un-invaded VSAT market
 Fuller utilization of slack resources
 Can make a kill through deep penetration and
low cost advantage
 Broaden market expected from convergence of
broadcasting, telecom and entertainment
industry
Having analysed the external environment and assessed the internal strengths and weaknesses of
BSNL, the key issues can be summarized as follows:
WEAKNESSES
 Non-optimization of network capabilities
 Poor marketing strategy
 Bureaucratic organizational set up
 Inflexibility in mindset (DOT period legacies)
 Limited number of value added services
 Poor franchisee network
 Legacy of poor service image
 Huge and aged manpower
 Procedural delays
 Lack of strategic alliances
 Problems associated with incumbency like
outdated technologies, unproductive rural
assets, social obligations, political interference,
 Poor IT penetration within organization
 Poor knowledge Management
THREATS
 Competition from private operators
 Keeping pace with fast technological changes
 Market maturity in basic telephone segment
 Manpower churning
 Multinational eyeing Indian telecom market
 Private operators demand for sharing last mile
 Decreasing per line revenues due to competitive
pricing
 Private operators demand to do away with ADC
can seriously effect revenues
1. innovative products based on convergent technology in order to acquire dominant market
position. BSNL can achieved by –
 Replacement of all the outdated technologies
 Redeployment of unutilized capacities should be considered first.
 Early deployment of cost effective Wi fi/Wi max Technologies
 Migrating to NGN (Soft Switch) on large scales, which will unable seamless integration of
upcoming technologies.
 Increasing the capital investment in convergent technologies even if it renders certain in use
technologies redundant.
2. BSNL should initiate Customer Orientation Strategy to retain existing customers as well as
to attract new customers by –

 Creating a Service-Oriented culture within the organization by linking incentives to

customer satisfaction.
 Introducing flexible Registration Terms so that new customers are attracted.
 Promoting/Introducing user-friendly service systems such as Electronic Clearing system,
internet or E-seva for bill payment
 Educating the customer about services in detail and respective tariff structure

 Introducing service at door-step.

3. Extensive use of IT can not only improve operations but can add to greater customer satisfaction.
Despite being a technology intensive organization IT penetration in BSNL is not commensurate.
Presently, the use of IT in BSNL is restricted to –

 DQ (Directory Enquiry), IVRS (Interactive Voice Response System)

 Accounting and billing systems
 Commercial & Fault Repair System package
 Telephone Directory on CD ROM and on the Internet.
4. shorten the purchase-decision cycle, BSNL should redefine procurement processes to which is
critical in project implementation to any telecom service provider. BSNL should enter in long
term supply contract with world-class players to come out of L-1 mantra of tendering process.
 This will help BSNL to counter the strategy of its competitors to stall the very procurements of
critical items.

5. BSNL-MTNL merger. Strategic alliance to get pan-India footprints through The

combined operations will also ensure several other sustainable advantages such as deeper
and stronger pockets and greater marketing clout.  These synergies would obviously help
BSNL by way of volumes to engage in prolonged tariff wars for a whole range of value-
added services and give private telecom companies a run- for- their money. The merger
of BSNL with MTNL can also give some respite to BSNL by expanding its resource kitty
with which it can fulfill its responsibility of providing rural connectivity all across the
country. 

6. Diversification strategy BSNL should have strategic alliance with content providers,
international long distance operators and cable operators as a. Turnkey projects for
providing total solutions to corporates /governments should be undertaken as a business
proposition by entering into partnerships.

7. marketing strategy needs to be redefined and should focus around Value Added
Services, building strong distribution chain and differential treatment to
premium/corporate customers.
8. Human Resource Management BSNL need to overhaul its Human Resource Management
strategy and should focus on –
 Tie up with top business schools in India for training their managers at various levels.
 Redeploying its manpower from bigger cities to smaller ones
 Coming out with VRS/CRS for manpower above the age of 50.
 Creating value through employee motivation and should develop reward and
punishment system
 Effective knowledge management within organization
 Preventing manpower churning
The VRS/CRS scheme is likely to be opposed by the unions and the implementation may be difficult
in the politicized environment. However, rightsizing the organization is of paramount importance for
the long run interests.
9. Restructuring of organizational on business type model BSNL’s organization structure
still remains more or less functional in structure. The with each product/segment
considered as a separate business will help in

a. Better management

b. Improved segmental efficiencies

c. Improved organizational communication

d. Better performance monitoring

e. Develop focus on revenue

10. Revenue Maximization Strategies: The telecom sector is the most competitive sector post
liberalization. This has resulted in a movement from growth based business model that
emphasized growth in numbers or even ARPU to profit-based model where the success is
measured by margins. BSNL as part of the transition has to adopt both cost reduction and revenue
enhancement measures, which would directly impact profitability. The key concerns for BSNL for
effective revenue realization are –

 The delay in customer billing after activation

 Time lag between calls generated and billed
 Scope of fraud
 Non-availability of uniform database.
11. Pricing strategy – Tariff fixation is crucial in a competitive scenario where it is required to offer,
“value based”, top down convergent services are being provided by the competitors instead of
cost based, bottom up pricing. The focus has been on acquiring profitable customers, however,
for BSNL, it is equally important to target the old (by number of years of association) customers
to ensure retention. Revenue figures indicate that ARPU is higher for that category of
subscribers. Loyalty programmes serve as an excellent platform for such strategy. The
customers’ feedback should be incorporated to assess the attractiveness and economic viability
of such programmes. A successful loyalty programme becomes the driving force in customer
relationship management strategy.
13. Cost Management Strategies: As a result of slow growth in revenues and declining market
share, focus is simultaneously required on cost control measures like –

 Integrated financial software is essential for the management to be able to monitor

costs.
 BSNL’s liability in terms compulsory operational expenses is very compared to industry
standards, primarily due to excess manpower. Though a high percentage of employees
will retire in three years time , however in order to expedite the process, voluntary
retirement schemes have to be introduced.
 BSNL is also burdened with legacy technology, which needs to be phased out, and
replaced with cost-effective technology alternatives.
 There is need to assess the core competencies of BSNL and outsource the non-core
activities like bill printing, call enter management etc. by transformational cost control.

SUMMARY

BSNL should change its very strategy of acting as follower to that of leader. Instead of
reacting to other operators move it should start acting proactively. BSNL should adapt
greater standardization and flexibility in systems. Only then new service rollouts will be
faster, and ideas will be converted into revenue streams. The overall strategy of BSNL can
be of concentrating on the mobile and broadband business in near future and to immediately
phase out loss making businesses like telegraph, VSAT communication etc. BSNL can
leverage on its pan India reach and economies of scale to achieve overall cost leadership. At
the same time capital investments can be made in next generation networks where stress
should be on Wi-Max, content based data service and VOIP. Emphasis on organizational
restructuring coupled with customer orientation and operational efficiency can help BSNL
find place in Asian Telecom market.