India - BSNL too slow

BSNL slammed for weak value added service biz

Concerned over the slow growth of BSNL, Telecom Minister A Raja has asked Department of Telecom to work out a mechanism where important decisions could be expedited fast to drive more revenue for the PSU.

"I am deeply concerned over the slow growth in business of BSNL in spite of regular review meetings with the officials of BSNL. It is a serious matter and it has to be monitored and reviewed by the secretary (telecom) on regular basis," Raja said in a letter to telecom secretary Siddhartha Behura.

DoT being the nodal ministry can ask the PSU to speed up decisions and the minister has asked the secretary to structure a device of regular monitoring of such proposals in DoT itself through the government's nominee on BSNL board.

Raja's ire has emanated from BSNL's slow pick-up on the value added service front in spite of financial incentives and business leverages.

The minister feels in the competitive environment there is scope for increasing revenue from value added services and BSNL can get much more revenue from VAS if it is able to take quick decisions.

"A large number of proposals for VAS on revenue sharing basis in which no investments is required from BSNL are pending with the PSU for long for decision making. BSNL may be directed to look into such proposals on priority and in time-bound manner," Raja said.

Raja's concern comes on the backdrop of private telecom operators drawing significant revenues from VAS and in a cheap tariff scenario, revenues from other services like VAS holds potential for a robust growth.

More so as BSNL is about to launch 3G services after getting spectrum and if the PSU is not fast enough in decision making process for VAS in tying up with content provider and other ecosystem partners, then its first mover advantage would be lost as private players would be given 3G spectrum at least four months later through auction.

BSNL's sister concern MTNL wants to get 15 per cent of its revenue from VAS, Bharti Airtel's VAS revenue has just gone up over 10 per cent and Rcom also has VAS revenue in double digits.

The Indian value added services is expected to log in a turnover of over Rs 20,000 crore by the year 2015, according to industry experts.

According to PriceWaterhouseCoopers, the Indian VAS industry is being driven by SMS with about 44 per cent of the share, followed by new applications Ringtones and RBTs, GPRS, CLI and other VAS.