Bharat Sanchar Nigam Limited (BSNL) is soon going to launch 4G in India using indigenous technology. It is worth noting that the state-run telco already offers 4G services in many parts of the nation. But this is not using homegrown tech. However, in the near future, the company is going to launch 4G with the help of Tata Consultancy Services (TCS), the Centre for Development of Telematics (C-DoT), and Tejas Networks. While the launch of 4G would put BSNL on the path to someday launching 5G as well, for a few specific reasons, it doesn't excite me much.
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BSNL is Not Going to be Able to Capture the Premium Consumers of Private Telcos
BSNL is unlikely to capture the premium market share of the private telcos. Even if it launches 4G, it is hard to expect that it would be able to compete with private telecom companies in urban areas. The private telcos, including Jio and Airtel, have already moved on to 5G and by the time BSNL brings its 4G to the entire India, these operators would have covered the nation with their 5G networks.
Most of the 5G phone users would then want to be the customers of the telecom operators that are offering 5G services in their area, town or city. BSNL needs to boost its average revenue per user (ARPU) from the mobile business, but it mostly has low-paying customers as all the high-paying customers are with the private telcos.
It isn't wrong to say that BSNL missed out on the window of opportunity that it had for many years to launch 4G. The telco still has the ability to make a comeback with the support of the government, which keeps on bringing relief packages to bail out the struggling operator. BSNL would be looking to capture the market share in the rural areas of India once it launches 4G. But in such areas, it would be hard for the telco to gain high-paying customers.
The state-run telco is expected to cover major parts of India with its 4G in the next two to three years. BSNL is using a 4G stack that can be upgraded to 5G without any hassle. It would be interesting to see whether BSNL also shifts to 5G in the next three years as it is in the process to launch 4G right now.
Whether 4G would be able to make a huge difference in the operator's business today or not is something only time will tell. BSNL would be in direct competition with the operators such as Airtel, Jio and Vodafone Idea (Vi) once it launches 4G.
