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April, May worst months in over a year

Thomas K Thomas

New Delhi, July 9 With its cellular expansion plans delayed by more than a year, Bharat Sanchar Nigam Ltd is losing its market share of the new subscribers being added every month. The State owned company had added over a million subscribers in October 2006, the company has been able to get only 3.2 lakh and 2.3 lakh new mobile users in April and May respectively.

In fact the net additions in the two months has been the worst ever for BSNL since January 2006. In comparison private operators are adding to their subscriber base quickly. While Hutch added 1.2 million and 1.5 million in April and May respectively, Bharti Airtel got 1.7 million and 1.8 million in the same months.

The reason for the slump is that BSNL’s last major network expansion was undertaken two years back in 2005. While private operators have since invested billions of dollars on ramping up their network, BSNL has got stuck in the tendering processes. The latest expansion project for 60 million cellular lines was envisaged more than a year ago, but it has run into rough weather first with Motorola challenging its disqualification and now the Communication Minister pushing the company to lower the contract price.

In January 2006 BSNL was the number two GSM operator with 15.3 million subscribers not very far from Bharti’s 17.3 million mobile users. But just over a year later, BSNL is down to number three position with Hutch overtaking it. As on May 2007, Bharti has over 40 million subscribers and Hutch has nearly 30 million users. BSNL on the other has 27.9 million.

According to BSNL officials the existing capacities are enough to cater to the demand for another two months at best after which, the growth rate may dip even further if the network is not ramped up quickly.

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