Bharat Sanchar Nigam Limited (BSNL) and Vodafone Idea (Vi) both need to stay in the market to ensure that India doesn’t become a country with a duopoly of Reliance Jio and Bharti Airtel. Pradeep Mehta, Secretary-General of CUTS International told ET Telecom that BSNL should be privatised and Vodafone Idea should be provided temporary relief to ensure the survival of the two struggling telcos. Mehta warned that if this doesn’t happen, India will suffer from a lack of competition since only two telecom operators would be functioning.
BSNL’s Subscribers Market Share Declining
People are slowly shifting from legacy networks (2G and 3G) to 4G networks. Further, with 5G on the way, there’s less chance that BSNL would be able to survive on the back of its 3G and 2G networks anymore. The telco’s subscribers market share has been declining very rapidly.
Mehta said that BSNL should be privatised. The comments from Mehta are completely understandable and they make sense to some extent. In the case of Vodafone Idea, the telco is struggling really bad to find a new investor so that it can pay off the debt and also invest in network expansion.
When the Supreme Court (SC) announced its decision on the adjusted gross revenue (AGR) dues matter, it hurt Vodafone Idea a lot. The telco was expecting to see a major reduction in the amount of dues that it had to pay to the government. But the SC has said that it won’t allow any change in the final amount that was given by the Department of Telecommunications.
It is worth noting that Sanjay Dhotre, former Minister of State for Communications had said that BSNL won’t be privatised because the telco will launch 4G in two years around India. But things aren’t looking too good for the telco and privatisation might be in the government’s books. As for Vodafone Idea, the telco is still on the lookout for raising funds.