BSNL flags potential 2G revenue hit

BSNL flags potential 2G revenue hit

State-run operator Baharat Sanchar Nigam Limited (BSNL) reportedly flagged to India’s Department of Telecommunications (DoT) any disinvestment from 2G networks will hit its revenue, and massively affect its standing in the Indian market.

Financial Express reported BSNL wrote to the DoT, stating disinvestment in 2G networks will put its revenues at risk, as 70 per cent of its customers are on a 2G connection.

The letter comes after the DoT committee pushed for BSNL to not purchase 2G gear, even for replacing expiring parts.

BSNL wrote in its letter, as seen by Financial Express: “Regarding the continuation of 2G services, the committee has observed that BSNL should migrate all its subscribers to 4G as 2G services are expected to go down significantly. In this context, it is mentioned that 2G subscriber base of all telecom service providers, except Reliance Jio, is still significant and cannot be ignored”.

The company noted rivals still hold a significant amount of connections in 2G. As of December 2019, Vodafone Idea has around 60%, Airtel holds 47%, while BSNL carries 70% of its base on the network standard.

“With such a significant 2G subscriber base, it is impossible to migrate to 4G-only network as substantial revenue of BSNL mobile service is from 2G customer base,” the company said.

BSNL argued the DoT’s recent submission of recommendations for the operator’s upcoming 4G tender, was not suited for the Indian market.

The DoT cited countries such as: Japan, Singapore, South Korea, Taiwan, Sweden, Norway and Switzerland, to having successfully cut 2G services.

“In this regard, it is stated that these countries are economically very developed and having high per capita income. Therefore, development of telecom network in these countries cannot be compared with India,” BSNL said.

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