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Overview : The case examines the emergence of BSNL as the leading company in the
Indian telecom industry in early 21st century. It explores in detail the changes taking
place in the industry through the early 1990s - primarily the entry of private players and
the emergence of cellular telephony. It focuses on the various products and strategies
adopted by BSNL for its growth and the future course of action.

Analysis : We will look at the case through the 4C framework: Context, Company,
Consumers and the Competition. The critical issues in each of these aspects and the
future course of action

Context( Background): There was tremendous growth in the telecom sector. The key
stakeholders involved are the Operators and the customers. The market was divided into
postpaid and prepaid users. The key issues here were
• High growth in prepaid users
• ARPU declining at the rate of more than 5%
• High Churn rate
• Less usage of Value Added service in the prepaid segment

Company: Bharat Sanchar Nigam Limited (BSNL) was formed on October 1, 2000. It is
the largest telecom service provider of India offering the full range of communication
services. It intends to make available affordable and effective communication for
citizens. The Value proposition is as follows
• Availability of affordable communication to all citizens
• Improve the quality of telecom services


Firstly let us look at the position in Value Network and the Segmentation of the

Content Providers
Equipment Manufacture

Key takeaway is that BSNL needs to have the right kind of infrastructure.
In this aspect we will look at the 7Ps framework and analyze it from that point of view.

Product( Services): Basic Telephony, mobile ( CDMA, GSM) technologies, Dedicated

leased circuits, Voice over IP, Internet services) . Scope in Intelligent Network Services

Price : The pricing was based on usage as per the tariff, apart from the installation. The
revenues were collected prior( for the prepaid users) or post usage.

Place: The place


The BSNL – Bharat Sanchar Nigam Ltd., is the largest telecom service provider of India
offering the full range of communication services – basic land line, wireless
mobile(CDMA), Leased line circuits, Internet telephony, etc. catering to various
segments SOHO ( Small office Home office), Corporate, Individuals, Business groups. In
terms of the revenue yield it is found that 15% of the subscriber yields more than 85% of
the revenue and this group when distilled further who result in a 5 % of the customer
population yielding 50 – 60% of the billing. In a competitive environment it is this group
of customers who are most vulnerable to be lured away by the private operators
(competitors). The following information has made an attempts to define the various
relationship markets present in the segment.


The product is provision of communication service( Basic Telephony, mobile ( CDMA,

GSM) technologies, Dedicated leased circuits, Voice over IP, Internet services)

The price is based on the usage charges as per tariff apart from the installation cost.
Discounts are offered to heavy callers.

The place of delivery is the customer premises/location.

The promotion very limited till recently. However now logos, brands names for different
services, slogans (Connecting India) etc have been coined. Very recently advertisement
in the print media as well as television commercials has been released. (

The people have a key role to play since it is a service sector. However this is the weakest
link in the marketing mix since the monopoly attitudes have hardly changed at the
ground level.

The process is another one of the neglected Ps. A lot of corrective processes have being
provided for after the complaints by line up of escalations, meeting the senior officials
etc. Yet the preventive/ proactive processes are not sufficient/ (work –in – progress).

The physical evidence (being a service sector) depends on the maintenance of front end
staff dealing with customer care, the office premises and facilities available there, toll
free numbers, call centers.

The main problem is faced by the company is that it cannot handle its existing customers
in an right manner like partly customers are satisfied with the service and partly are still
need to be satisfy, this can be done only through taking customer care as main area
while segmentation.


Apart from the marketing mix described above the steps taken towards customer care
can be taken through dividing them in different groups
These may be grouped into preventive processes, empowering the grass root level, work
in progress which are very critical in customer service/ improving service availability
level, Bill payments made easy and some measures quite frivolous as application form
being made free.( A typical example of the monopoly hangover).

The Company has identified the high callers or those who make calls worth more than
Rs.5, 000/- per month as the high calling segment. This kind of segmentation purely
based on the revenue yield alone results in a heterogeneous group of high calling
individuals, companies, corporate with inter city presence. Neither has this group been
refined further for preferential differentiation nor are any of the measures specified in
the customer care specifically targeted towards this groups. Of course the system
corrections undertaken would benefit the high callers as well. Hence apart from
providing certain billing discounts or special meeting time the issues cannot be very
clearly addressed.

Classification of customers (Jones and Sasser Model (1995) )

If one were to use this model for classifying this segment further it would be seen that
about 10% would be in the Hostage category. They are vocal, corner the available
resources for servicing and are complaining in nature. And the experience of the BSNL
managers is that this category normally contributes less to the revenue pool and hence
would not be attractive to the competition. A majority about 60%of the segment would be
in the Mercenary category, ready to make a shift, about 20% would be in the defector
and terrorist segment (this would include the media and think tank users of the
communications) would be make use of every opportunity to spread the negative image
and a loyal group of about 10% who are satisfied and stay with the company through the

BSNL should reward the loyal group by giving strength to their voice, try to neutralize
the impact of the defector terrorist group using pressure strategy and try to move the
Mercenary to the Loyal group. It should also know how to shake off the hostage group
without explicitly stating so.



1) The High calling segment is distilled further on the basis of revenue yield and country
wide presence.

They should be given classified as Platinum, Gold, Silver, classic groups based on their
total countrywide billing and these member subscribers should be eligible for country
wide facilities. The senior officers, frontline and other staff should be educated about the
value of these groups and they should be provided with premium service.

2) The requirements should be studied ( guaranteed uptime of service, fault attendance

within the stipulated time, 24x 7 service, integrated billing, single point contact or Key
Accounts Manager, etc) and addressed.

3) Being a public company major problem can be of over staff which need to be cut off
but instead of cutting the staff company can use its some employees in marketing their
product as they working in the company since many years they have more knowledge
about the company and the services which company offers.

4) The provision of total solutions still remain a myth as the customer has to still run
between various wings ( Circuits, Basic phone, Mobile, Internet, Long distance) for their
communication needs. Nodal points for interacting should be provided. This would
actually help the company sell more as a corporate group having Leased Circuits will
also need land lines for office/ residences, mobile communication needs for their officers
and sales staff etc.


A.K. Sinha, who served as Senior Deputy Director-General (Switching) in Bharat
Sanchar Nigam Limited's (BSNL) corporate office before assuming charge as its
Chairman and Managing Director (CMD) in September 2004, has brought his
knowledge of various telecom switching systems and other important aspects of
telecommunications to India's largest telecom service provider.
Sinha joined the Indian Telecommunication Service in 1969 and has held the posts of
General Manager (Development) in Mahanagar Telephone Nigam Limited's (MTNL)
corporate office and in MTNL, Delhi, and Chief General Manager of Andaman and
Nicobar Islands and Jharkhand Telecom Circles.
He has experience in the installation and commissioning of various switching systems in
the networks of Calcutta and Delhi Telephones. As Divisional Engineer (Installation), he
was instrumental in commissioning the first C-400 type Japanese telephone exchange in
Calcutta Telephones and thereafter in MTNL, Delhi. He worked for three years in the
Telecom Department of Nigeria.
How do you see BSNL's future as a leader in the telecommunications sector? In terms of
growth, what is the key factor behind the entity's fiscal result for the previous year?
BSNL holds the top position in the telecom sector and will continue to do so. We have the
unmatched footprints of our service spread across the country. Being one of the largest
public sector enterprises, BSNL has always delivered targets taking into account the
social and regional goals. Our last fiscal results give a clear picture of our continuous
growth despite fierce competition. We are proud of our impressive growth of over 50 per
cent. I believe over a period of time we have improved the delivery of our services, which
is the most functional factor in awarding us significant growth.
Can you detail the steps being planned by BSNL to expand its service from basic to
mobile telephony to broadband?
Despite the impressive strides [made in the sector] over the past few years, India has low
teledensity compared to many other countries. Hence, we see a large potential in various
States. The government has decided to double the teledensity from 10 per 100 people to
20 in the next three years. Public sector telecom units have been given the mandate to
double their own networks. So, we are in the process of doubling the capacity and
penetrating areas that have not yet been covered.
From covering all district headquarters, we plan to spread our footprints to all block
headquarters. A 60 million GSM [Global System for Mobile Communications] equipment
acquisition tender is already on as part of mobile telephony expansion plans. BSNL is
also expanding its base in broadband services and hopes to add a million subscribers
every year, changing the country's Internet usage. Also, BSNL's network is expected to
reach all villages by 2007.
What are BSNL's landmark achievements in the current year?
It has broken all its past records by registering an impressive growth of 55.6 per cent in
Direct Exchange Line. It registered a 9 per cent rise in its operative income. Apart from
this, BSNL has added a large number of consumers, much more than its target, to its
cellular and basic subscriber base and is doing remarkably well in broadband and
village telephony.
In the growing competition among service providers, how does BSNL plan to stay in the
top position?
BSNL is the leader in all service areas that it operates. Whether it is basic telephony or
cellular or CDMA-based telephony or Internet. As I said earlier, we have an expansion
plan for 60 million lines in mobile telephony alone.
In another three years, when the country's teledensity reaches 20 per 100 people, BSNL
will have a 50 per cent market share. The rest of the players together will share the
remaining market.
With our reach and footprint and expansion plans, we will still hold the leadership role
in all areas of telecom service despite fierce competition in the market.
There appears to be a fair reduction in last year's waitlist. What steps are planned to
clear the wait list?
In fiscal 2005-06, BSNL reduced the waitlist from 16.20 lakhs to 12.69 lakhs in both the
landline and mobile sectors. As per our expansion plan, we are qualitatively improving
our network with the introduction of state-of-the-art technology to meet the requirements.
The 60-million expansion plan is aimed at clearing the waiting list as well as adding new
areas and population to our network.
What is your expansion plan for the current fiscal?
Apart from the ongoing one, we plan to add 20 million GSM lines this year. Once the
roll-out of the 60-million GSM tender happens, we will be able to launch 3G mobile
phones. We hope to add a million broadband subscribers to our network. We are also
taking steps to arrest the surrender of phones in our network.
Although there is a net increase in subscribers, we are launching a series of measures to
make basic telephony more attractive. Above all, we plan to improve the quality of our
services and our profits.
This year we expect to emerge as the largest mobile telephony operator in the country
even in numbers, although we are not present in the two largest areas of operations -
Delhi and Mumbai