3G may not mean more revenue for BSNL

28 Feb 2009, ET Bureau

KOLKATA/NEW DELHI: Bharat Sanchar Nigam Ltd (BSNL) may have launched 3G services in 11 cities on Friday with plans to extend coverage to another 700 cities within three months, but the state-owned telco could still lose out on a massive revenue opportunity from this high-end service.

There is a view in the government and across sections of the industry that had BSNL entered into roaming agreements with any of the existing private GSM operators, the customers of such private operators with 3G phones could have accessed BSNL’s high-end services while roaming and generated revenue for the state-owned telco.

BSNL is the country’s fourth-largest mobile operator and has a little less than 50 million mobile customers accounting for nearly 13% of the country’s cellular users.

Last year, the government allotted 3G spectrum to state-owned telcos, BSNL and MTNL. Private players were slated to get 3G airwaves through an auction process, but these have been delayed on account for several factors.

Currently, all mobile services offered by private operators are done on second-generation networks using 2G airwaves. This is why numerous non-BSNL users with pricy 3G phones that ETspoke to, were a visibly frustrated lot. “It’s indeed frustrating that despite possessing a 3G phone for months, I continue to be deprived of a 3G service since I am not a BSNL mobile subscriber,” said an irate subscriber of one of India’s biggest private telco.

BSNL has a very different take on its 3G strategy. Its executives, while maintaining that the state-owned telco wanted its 3G services to be exclusive to its customers alone to exploit the first-mover advantage, also stressed that seamless roaming between 2G and 3G networks would not be technically feasible.

“Customers on 2G networks of private operators cannot roam on our 3G networks. Roaming agreements are very specific and inked on a reciprocal basis which implies that only operators with similar networks can enter into such commercial tieups. This rules out the possibility of us tying up with any private player until they have similar infrastructure. Subscribers with private operators are welcome to subscribe to our 3G services by picking a BSNL connection,” explained a top BSNL executive.

But private operators and their industry bodies disagree with BSNL’s stance. “It’s technically possible for a roaming agreement to happen between GSM operators if there is seamless 2G-3 G connectivity at the BSNL end. After all, a roaming pact is essentially a signalling arrangement between two operators allowing flow of information, data and voice, between two networks. National roaming guidelines also call for free flow of information,” said a senior industry representative of the Cellular Operators Association of India, the body representing all GSM players.