BSNL may open up lines for pvt firms

In a move that could revolutionise internet access for millions, state-owned Bharat Sanchar Nigam Limited is considering opening up its last mile local loop (fixed copper lines) for broadband services to private players.

This means private firms, that find it difficult to lay separate copper lines to each household, will be able to use BSNL's lines in return for a revenue-share.  BSNL has about 28 million fixed line connections and India has eight million broadband connections, so potentially all the state-owned company's land lines can be converted to broadband connections.

Since BSNL's fixed line base is shrinking by around a million every year, converting these to broadband would also help retain customers and increase revenues for the troubled public sector company. The company's profit fell to about Rs 500 crore in 2008-09 from over Rs 10,000 crore in the previous year.

"We are looking at various tie-ups with private players for unbundling our local loop," a senior BSNL official told Business Standard. The matter was discussed in BSNL's board meeting on March 10. So far, BSNL has been reluctant to share last mile connectivity, the final leg of delivering connectivity from an operator's end to the customer's place, fearing a loss of market share and revenue.

While telecom regulator Trai had recommended that BSNL allow private firms to use its lines, the company was not in favour. The change of heart appears to have been prompted by the Sam Pitroda committee, which last month recommended unbundling of local loop for public and private companies to launch new services on a non-exclusive basis.

BSNL is looking at the franchisee model for its broadband operations and will soon appoint a partner for it. The Pitroda committee said BSNL should offer broadband connections with relevant and useful applications with content in local languages, besides significantly improving quality of service and consider offering service-level guarantees. The committee also suggested BSNL target a broadband base of 30 million in the next three years.

The committee, which also had HDFC chairman Deepak Parekh and telecom secretary P J Thomas, was formed to look at options for BSNL's revival. The state-owned company was once the number two service provider in India and is now steadily losing market share.

At the end of January this year, the total number of broadband subscribers across the country stood at 8.03 million, of which BSNL has over 5 million users. BSNL operates all across India, except Mumbai and Delhi. The company has been adding 150,000 lakh new users for its broadband services and hopes to continue this momentum.