Bharat Sanchar Nigam Limited (BSNL) and Vodafone Idea (Vi), two of the ailing telecom operators, are working as hard as possible to make a U-turn towards success. Both telcos have been struggling for as long as one can remember. There's not been a single positive quarter for Vi since Vodafone and Idea merged. While both telcos are not the top picks for consumers or investors, they are desperately needed in the Indian market. BSNL is a govt run company; thus, it can't take private investments (nor would any private company be interested as what has been happening with Vi). However, BSNL still gets relief packages from the government, but Vi won't get it in a direct manner. In September 2021, the govt stepped in with relief measures and potentially saved the future of Vi. There were reasons behind the move. Why are BSNL and Vi so important in India, and why is the govt doing everything in its power to keep the two running? Here's why.
Avoiding the Duopoly of Jio and Airtel
If BSNL and Vi go out of business, it will leave Indian consumers with Jio and Airtel. The duopoly of both companies can be potentially hazardous for the Indian market. It could lead to telcos becoming ignorant of the consumer needs as the consumers won't have any other option to go to. It would also lead to a downfall in the quality of service as it would be hard for Airtel and Jio to alone serve the complete nation.
A Downfall for the Economy
The government knows that if the two companies go out of the market, it will lead to many jobs ending. This would be catastrophic for the economy. BSNL and Vi are both huge corporations with several thousand employees in all parts of the nation. Both generate significant employment for Indians.
At the end of the day, it would be the consumers suffering along with the economy if Vi and BSNL don't do well in the long run. India is a vast market with enough potential for companies like Vi and BSNL to start generating good money for business.