BSNL rules out tariff hike, aims to gradually phase out Chinese equipment

The current priority is to make 4G work flawlessly, said minister of state for communications Pemmasani Chandra Sekhar

State-run telecom operator BSNL has no immediate plans to raise tariffs and is instead focused on ramping up its 4G user base across India, Minister of State for Communications Pemmasani Chandra Sekhar said on July 28.

The government also plans to replace ageing Chinese equipment powering BSNL’s legacy 2G and 3G networks with indigenous 4G infrastructure, though no fixed timeline has been set for the transition.

While 2G and 3G services will be gradually phased out, the shift to homegrown 5G remains on the horizon, with no concrete rollout plans for now. “For BSNL’s customer base, 4G is currently sufficient,” the minister added.

Pemmasani said the current priority is to make 4G work flawlessly. “Even other telcos see that 4G meets the needs of 75% of users. That said, indigenous 5G core and technology are available, and we’ll move ahead when financially viable,” he said.

The government is targeting 20–30% annual revenue growth for BSNL, supported by improved network uptime, fewer fiber cuts, and a circle-wise push to raise average revenue per user (ARPU).

“Each circle has been given targets based on past performance — mobile customer growth, ARPU, fixed wireless, etc. We’re aiming for 20–30% revenue growth annually,” he said.

BSNL has installed 100,000 indigenous 4G towers, the minister said, adding that the integration process was challenging. “Global players like Nokia and Ericsson have had decades to mature their technology. But in just 2–3 years, we’ve resolved 90–95% of the issues, and the system now works reliably across most sites.”

BSNL's revenue from operations grew 8% to Rs 20,841 crore in FY25. Its losses also narrowed to Rs 2,247 crore from Rs 5,371 crore in FY24. As of May-end, BSNL had 90.7 million mobile subscribers, according to data by the Telecom Regulatory Authority of India (Trai).

The company’s market share was at 7.8%. Jio had 490 million customers as of June-end, while Airtel had 362 million as of March-end. Bharti Airtel has yet to report its June quarter earnings.

BSNL recorded a year-on-year revenue growth of 20–30% in the April–June quarter, Minister of State Pemmasani Chandra Sekhar said. He attributed the growth to the successful rollout of 4G services, which he noted are both effective and cost-efficient. Additionally, issues related to battery backups at telecom tower sites have been resolved, further supporting network reliability.

When asked whether TCS and Tejas Networks were given directions to improve service quality, Pemmasani said, “That is the whole purpose of this exercise. When a technology is deployed and used by millions, it’s not possible to catch every issue upfront. But the goal is to identify problems quickly and correct them, and that’s what they’ve done.”

The remarks came on the sidelines of a high-level review meeting chaired by Union Minister for Communications Jyotiraditya M. Scindia in New Delhi, where BSNL’s 32 Chief General Managers (CGMs) from across the country gathered to assess operational progress, discuss regional challenges, and chart the path forward.

Minister Pemmasani and senior officials from the Department of Telecommunications (DoT) also attended.

Scindia pushes for service quality, revenue growth, and customer focus

Addressing the CGMs, Scindia stressed the need for a structured strategy to enhance service quality, including conducting customer perception surveys. He also directed DoT officials to submit a detailed business plan outlining monthly revenue and expense targets.

The ministers asked BSNL’s circle heads to formulate cross-selling and upselling strategies to drive revenue and expand services in regions underserved by private operators.

“It is not important to look at operating cash flows or net profit. It's important to look at customer satisfaction. It's important to look at the growth of the customer base, upselling and cross-selling of products,” Scindia told reporters. He added that such efforts would also help boost BSNL’s ARPU.

BSNL’s monthly ARPU varies significantly across circles, ranging from as low as Rs 40–Rs 45 to as high as Rs 175. In comparison, Reliance Jio reported an ARPU of Rs 208.8 as of June-end, while Airtel’s stood at Rs 245 as of March-end.

Scindia further directed BSNL to target 50% growth in its mobile services business and 25–30% growth in its enterprise segment over the next year.

He also informed that monthly reviews will be conducted by MoS Sekhar, with quarterly reviews chaired by him.

The government is optimistic that Bharat Sanchar Nigam Limited (BSNL) will generate strong operating cash flows in the coming quarters, as the state-owned telecom company ramps up its 4G rollout and strengthens its service portfolio, Scindia said.

“It’s important to focus on the business’s cash flows rather than just the bottom line, which includes non-cash items like depreciation and amortisation,” Scindia said. “This year, BSNL has seen the highest capital expenditure in its history — Rs 25,000 crore — resulting in a Rs 2,500 crore non-cash impact on the bottom line.”

Scindia also instructed BSNL’s circle general managers to re-engage with customers across rural, urban, enterprise, and retail segments; enhance service quality and customer relationship management; and scale up enterprise offerings such as connectivity, VPN solutions, leased lines, and other emerging business opportunities.