Future directions and policy for Karnataka telecom circle: a critical appraisal

Abstract

Telecommunication services in India have been going through a phenomenal period of reforms in the last decade. This period brought in tremendous amount of competition in this sector. BSNL (Bharat Sanchar Nigam Limited) is facing tough competition from private players like Bharati, Reliance, TATA and others. These companies are concentrating in urban areas and aggressively pursuing the creamy customers of BSNL by means of pricing and promotion. Further, due to falling tariffs of mobile service there is a shift in preference of mobile phones over landline. This has resulted in negative or almost stagnant growth for BSNL in landline segment. The result is a lot of capacity of landline network is not utilized and remains idle for past few years. In addition, being state owned operator BSNL is the only operator serving in rural areas. Enough support from USO is not available as it is still evolving. Under these circumstances, BSNL has to think of alternative approach to its expansion plans in terms of investment and technology and strategy to fill up the idle capacity by way of new services like broadband. In this dissertation an attempt is made to study the BSNL network of Karnataka in respect of cost, revenue, traffic, new services like broadband to be able to prioritise the exchanges in terms of giving attention for business and future investment. The cost of providing a line in urban and rural area is calculated. Similarly the Access Deficit Charges (ADC) is estimated for each district. The ADC for rural and urban are calculated separately to emphasize that access deficit is much higher in rural areas. The cost of different type of calls is calculated both in rural and urban to base future strategies in terms of pricing and promotion. The traffic pattern for traffic originating from Karnataka or terminating in Karnataka is studied. It is seen that 76% traffic is confined to Karnataka and only 24% exits out of Karnataka. Mobile contributes highest amount of traffic in TAX exchanges. This analysis can provide insights into possible tariff and marketing schemes. Finally it has been established that expanding by GSM will be a better option However if facilities like broadband could be given in a large way in cities like Bangalore, Mangalore even landline will be a good option in terms of return.