Department of Commerce and Management Studies

STRATEGIC MANAGEMENT
Strategy Formulation of BSNL

Submitted to, Dr. P MOHAN FACULTY DCMS

Submitted by, HARIKUMAR C NEENU V M SAREESH K Submitted on: 22nd Oct. 2012

CONTENT
Company Profile Environmental Analysis Competitors analysis SWOT Analysis Strategy Formulation Summary

COMPANY PROFILE
BSNL is a state owned telecommunication company in India formed on 1st October2000, is one of the largest & leading public sector units providing comprehensive range of telecom services in India. It is the largest provider of fixed telephony and fourth largest mobile telephony provider in India, and is also a provider of broadband services. It has footprints throughout India except for the metropolitan cities of Mumbai and New Delhi, which are managed by Mahanagar Telephone Nigam (MTNL). Before 2000, BSNL was known as the Department Of Telecommunications. During this period, BSNL was the only telecom service provider in the country. The corporation tasted competition for the first time after the liberalization of Indian economy in 1991.

Services provided by BSNL

3G:BSNL offers the '3G' or the'3rd Generation' services which includes facilities like video calling, live tv, 3G Video portal, streaming services. Universal Telecom Services: Fixed wire line services & Wireless in Local loop (WLL) using CDMA Technology. Cellular Mobile Telephone Services: BSNL is major provider of Cellular Mobile Telephone services using GSM platform under the brand name Cell One & Excel (BSNL Mobile). WLL-CDMA Telephone Services: BSNL's WLL (Wireless in Local Loop) service is the most reliable and affordable service. Internet: BSNL provides internet services through dial-up connection (Sancharnet) as Prepaid, (NetOne) as Postpaid and ADSL broadband (BSNL Broadband). Intelligent Network (IN): BSNL provides IN services offers value-added services, such as Free Phone Service (FPH), India Telephone Card (Prepaid card), Virtual Private Network (VPN), Universal Access Number (UAN) and more. IPTV: BSNL also offers the 'Internet Protocol Television' facility which enables us to watch television through internet. FTTH: Fibre to The Home facility that offers a higher bandwidth for data transfer.

ENVIRONMENTAL ANALYSIS
Analysis of Industry
India has the fastest growing telecom network in the world with its high population and development potential, and it is the 2nd largest telecommunication system in the world. Indias public sector telecom company BSNL is the 7th largest telecom company in world. The total number of telephone subscribers in the country stands at 914.59 million. India was purported to overtake China to become the worlds largest mobile telecommunications market by the year 2013. It was also predicted that by 2013, the tele density will shoot up to 75% and the total mobile subscriber base would be a colossal 1.159 billion. Telephone Industry in the country which is in an ongoing process of transforming into next generation network, employs an extensive system of modern network elements such as digital telephone exchanges, mobile switching centers, media gateways and signaling gateways at the core, interconnected by a wide variety of transmission systems using optical fiber or Microwave radio relay networks. The access network, which connects the subscriber to the core, is highly diversified with different copper-pair, optic-fiber and wireless technologies. Telecommunication has supported the socioeconomic development of India and has played a significant role to narrow down the rural-urban digital divide to some extent. It also has helped to increase the transparency of governance with the introduction of e-governance in India. The government has pragmatically used modern telecommunication facilities to deliver mass education programs for the rural folk of India. In India, fast developments are taking place in telecommunication industry, now a days. Introduction of 3G mobile services is one among them. If any company cannot undergo with these changes they will surely thrown out of the market. But a major problem in this industry is the regulations of TRAI. Companies need to take a lot of time and efforts to go through with the changing rules and regulations of TRAI. And sometimes, customers have to bear the burden of it.

COMPETITORS ANALYSIS
BSNL competes with other mobile operators throughout India. Following are the major competitors for BSNL. Aircel Airtel Idea MTNL MTS Reliance Communications Tata DoCoMo Tata Indicom Uninor Videocon Virgin Mobile Vodafone Bharti Airtel is the market leader both in terms of Revenue Market Share (RMS) and Customer Market Share (CMS). Bharti is followed by Reliance Communication and Vodafone. Private operators hold 88.01% of the wireless market share where as BSNL and MTNL, two PSU operators hold only 11.99% market share. BSNL and MTNL, two PSU operators hold 82.61% of the Wireline market share. Other mobile operators like Vodafone and idea, try to capture the market by investing huge amount in advertisement. Idea cellular can capture the markets in rural areas widely. By giving various offers, other companies can retain the existing customers and attract more to their service.

SWOT ANALYSIS
STRENGTHS
Service in Rural Areas Experienced telecom service provider Total telecom service provider Huge Resources Huge Optical Fiber network and associated bandwidth Customers trust on BSNL Strong ethical view in business

WEAKNESS
Poor marketing strategy Bureaucratic organizational set up Limited number of value added services Legacy of poor service image Huge and aged manpower Procedural delays Lack of strategic alliances Problems like outdated technologies, unproductive rural assets, social obligations, political interference, etc. Poor IT penetration within organization Delay in accepting new technologies

OPPORTUNITIES
Tremendous market growing at 20 lakh customers per month Under tapped broadband services Untouched international market Leveraging the brand image to source funds Fuller utilization of slack resources Can make a kill through deep penetration and low cost advantage Broaden market expected from convergence of broadcasting, telecom and entertainment industry Strong customers support in rural areas

THREATS
Competition from private operators Keeping pace with fast technological changes Market maturity in basic telephone segment Multinational eyeing Indian telecom market Decreasing per line revenues due to competitive pricing High bargaining power of customers

VISION
To become the largest telecom Service Provider in Asia.

MISSION
Be the leading telecom service provider in India with global presence. To provide world class State-of-art technology telecom services on demand at affordable price To Provide world class telecom infrastructure to develop countrys economy Leveraging technology to provide affordable and innovative products/services across customer segments Providing a conducive work environment with strong focus on performance Building effective IT systems

OBJECTIVES
To be the Leading Telecom Services provider by achieving higher rate of growth so as to become a profitable enterprise. To provide quality and reliable fixed telecom service to our customer and thereby increase customers confidence. To provide customer friendly mobile telephone service of high quality and play a leading role as GSM operator in its area of operation. Strategy for: Rightsizing the manpower, Providing greater customer satisfaction Contribute towards: Broadband customers base of 20 Mn in India by the end of 2011-12 as per broadband policy 2004. Providing telephone connections in villages as per Government policy. To leverage the existing infrastructure of BSNL for facilitating implementation of other government programs and initiatives particularly in the rural areas.

STRATEGY FORMULATION
Technology based strategy

BSNL should go in for innovative products based on improved technology in order to acquire dominant market position. Early deployment of cost effective wifi/wi max technologies Increasing the capital investment in convergent technologies even if it renders certain in use technologies redundant.

Customer based strategy

Retain existing customers as well as to attract new customers by Creating a Service-Oriented culture within the organization. Introducing flexible Registration Terms so that new customers are attracted. Educating the customer about services in detail and respective tariff structure. Providing an effective customer care service.

Marketing based strategy

It should focus around Value Added Services, building strong distribution chain and differential treatment to premium/corporate customers BSNL should come out with a variety of schemes for the end subscriber, both commercial and residential. To meet the technological challenges, employees need to be trained for technology upgradation, modernization, computerization etc in a targeted manner. Though different training programs are being run in various training centers of BSNL to impart technology based training, they seem to be outdated in the fast changing competitive environment and with formation of corporate. Better management Improved segmental efficiencies Improved organizational communication Better performance monitoring Develop focus on revenue.

Human resources based strategy

Structure based strategy

RESTRUCTURING OF ORGANIZATION BSNLs organization structure still remains more or less functional in structure. Restructuring of organization can with each product/segment considered as a separate business will help in: Better management Improved segmental efficiencies Improved organizational communication Better performance monitoring Develop focus on revenue

SUMMARY
BSNL should change its very strategy of acting as follower to that of leader. Instead of reacting to other operators move it should start acting proactively. The overall strategy of BSNL can be of concentrating on the mobile and broadband business in near future and to immediately phase out loss making businesses like telegraph. BSNL can leverage on its pan India reach and economies of scale to achieve overall cost leadership. At the same time capital investments can be made in next generation networks where stress should be on Wi-Max, content based data service and VOIP. Emphasis on organizational restructuring coupled with customer orientation and operational efficiency can help BSNL find place in Asian Telecom market.