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TOPIC - BSNL
PREPARED BYJIGAR PATEL A.P.ANU SUJAL SHETH
v Introduction v Factors of production v Demand determinant v Supply of services v Cross elasticity of demand v Income elasticity of demand v Perfect competitive market v Market failure and inefficiency v opportunity cost v Consumer surplus v producer surplus
INDIAN TELECOM SECTOR
q India is the second largest telecom industry after China( subscriber base), with lowest tariff rate. q It is contributing 2.71% to the total GDP. q Subscriber base is growing as 6 million every month.
q Formed in october,2000 q World’s 7th largest Telecommunications Company q District headquarters covered618 q No of villages covered- 5.5 lacs. q No of towns covered- 22655
q According to June 2009a) wire line subscriber- 28.79 million
b) wireless subscriber – 54.36 million 12/07/2010
§ CDMA mobile § GSM Mobile § Internet. q Services provided§ Wire line. Broadband § Carrier service § MPLS-VPN § VSAT § VoIP services § IN Services 12/07/2010 5 .Conti….
FIXED LINE STRUCTURE 12/07/2010 6 .
q To Provide world class telecom infrastructure in its area of operation and to contribute to the growth of the country's economy. MISSION AND OBJECTIVES VISION To become the largest telecom Service Provider in Asia. MISSION q To provide world class State-of-art technology telecom services to its customers on demand at competitive prices. 12/07/2010 7 .VISION.
q To provide quality and reliable fixed telecom service to our customer and there by increase customer's confidence. OBJECTIVES q To be the Lead Telecom Services Provider. q To facilitate R & D activity in the country. q To provide point of interconnection to other service provider as per their requirement promptly. 8 12/07/2010 .
q Earlier most lines in service used wires and carried voice. q People are using mobile as a primary voice device while the landline is a backup device. 12/07/2010 9 . q Mobile revenues account for nearly half of all telecommunication revenue. q 74 % of all lines in service used wireless access or carried data.GLOBAL SCENARIO q Business has been changed since 2000.
Overview 12/07/2010 10 .
q Urban teledensity 7.INDIAN SCENARIO q Fastest growing sector in India.34 million connections are wire line.66 million connections are wireless. q Total Teledensity is 3. 12/07/2010 11 . q 37.26.22 as per June 2009.39. q Revenue Rs.87 and rural teledensity is 1.108crores( June 2009) q Total 479 million phone connections ( July 2009) q 441.
q Mergers and acquisitions are expected to reduce the number of operators to 5-7. q Internet subscriber base 45 million.EXPECTED GROWTH TILL 2012 q Fixed line subscriber is expected to reach 45 to 50 million driven by broad band growth. 12/07/2010 12 . q Broad band subscriber base 25-30 million.
q Providing telephone connections in villages as per government policies.CONT…….. q Rural market will be the next growth driver with the near saturation of urban market. 12/07/2010 13 . q The network will be made fully digital.
ALL INDIA WIRELINE DISTRIBUTION OF BSNL 12/07/2010 14 .
12/07/2010 15 . q Time to time new plans and schemes are introduced.CUSTOMER SERVICES q For help line toll free numbers are there. q All customer service centers are open from 8 to 8. q Online payment facility.
FACTORS OF PRODUCTION q Employees and labors q Technology q Raw material and machineries a) copper wires b) telephone instruments 12/07/2010 16 .
which affects the expenditure of providing the services q Change in the price of raw materials 17 . q There is an continuous increase in the employee recruitment.IMPACT OF CHANGE IN FACTORS OF PRODUCTION 12/07/2010 q Change in the technology affects the most to the services of BSNL.
DEMAND DETERMINANT q Price – elastic q Income .elastic q Emerging substitute goods q Taste and preference q Accessibility of services 12/07/2010 18 .
88 3.34 0.22 98.65 38.11 16 12 5 5 4 2 2 1 Rate 200-500kms 19 .58 6.53 41.75 Mobile 0.91 40.CHANGE IN THE DEMAND Year 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 12/07/2010 Landline 14.33 40.88 1.6 21.68 13 33.92 41.69 52.54 40.77 165.65 32.54 17.2 1.59 26.
.CONTI…. 12/07/2010 20 .
the rates of the landline service remain constant till 2006. q After 2000. there was an increase in the rates in the BSNL landline services. q From the year 2002.EXPLANATION 12/07/2010 q In the year 2000. there has been a constant decrease in the rates. q Demand for fixed phones depends on the relative prices of access and 21 . q After 1997. q But later on it started declining. the rates were at peak.
SUPPLY OF BSNL SERVICES 12/07/2010 22 .
q In the year 2009. the wire line was more than the wireless services.EXPLANATION q In 2004. the wireless increased 12 times more than the wire line. 12/07/2010 23 . q After that every year it declined constantly.
CROSS ELASTICITY OF DEMAND 12/07/2010 24 .
INCOME ELASTICITY OF DEMAND FOR BSNL SERVICES 12/07/2010 25 .
10% it reduced to 27.90% and in the year 2009 it came to 72. q In 2008 it was 70.50%. q But the market share of the rural areas has decreased in these two years.50%.EXPLANATION 12/07/2010 q The income from the urban areas has increased constantly in the wire line market. 26 . q From 29.
MONOPOLISTIC COMPETITION MARKET AS PER JUNE 2009 12/07/2010 27 .
q There entered many players like Reliance. HFCL and Shyam. MTNL.EXPLANATION q We consider BSNL as having the Monopolistic competitive market. Bharti. q Earlier it was a monopoly of the Government. 12/07/2010 28 . Tata.
BSNL AS A MARKET FAILURE AND MARKET INEFFICIENCY q Improper allocation of resources q Externalities q Inequitable distribution of resources. 12/07/2010 29 .
50 41102.OPPORTUNITY COST Year 2000-2001 2001-2002 2002-2003 2003-2004 2004-2005 2005-2006 2006-2007 12/07/2010 Direct Exchange DELs added Line annually 32436.10 37848.93 1036.30 506.40 5924.40 41378.00 2212.90 -788.96 1588.90 275.30 40753.80 5412.90 Waiting List 2947.00 535.87 1810.50 40566.89 1218.20 40060.06 1685.75 30 .07 1798.
CONSUMERS SURPLUS 12/07/2010 q Different types of plans being introduced q Providing services to the rural and remote areas at a relatively cheaper price q Providing rebates to the customers for paying annual rent in advance q Providing free caller 31 .
q Government is paying BSNL for providing telephone services as VPT ( Village public telephone) to the villages. q USOF( universal service obligation fund) by the Government for providing services 32 . government was giving compensation on IUC( Inter usage charge).PRODUCERS SURPLUS 12/07/2010 q Up to 2006.
administrative and other expenses are also approx 35%.02 to Rs. 12/07/2010 33 .363 crore in 2008-09.VARIABLE COST q Remuneration costExpense on staff has increased as Rs. q Expense is increasing year after year. q It is approx 35% of the revenue. q Operating . 11.3848 crore in 2001.
q “ 1*6 rule” introduced by Income tax department.FISCAL POLICIES q BSNL has to purchase 60% of its equipments from the public sector units(ITI). q Payment of license fee. 12/07/2010 34 . q Reduce the percentage of Access deficit charge.
MONITORY POLICIES 12/07/2010 35 .
q Under. the USO( Universal service obligations) the service providers are subsidized for their network expansions cost in rural and remote areas. 12/07/2010 36 . but later on in 1991 due to privatization and liberalization it got opened for the private players.INDUSTRIAL POLICIES q Earlier it was the monopoly of Government sector. q Low utilization of subsidies by USO.
12/07/2010 37 .RISK AND UNCERTAINITIES INVOLVED q USO’s focus has been diverted from the fixed phones to the mobile phones q Recovery of customers payment is uncertain. many subscribers disconnected their landline connections. q Due to 1*6 rule.
. q Marketing skills are below average. q Political instability q Economic instability. 12/07/2010 38 . q Urban area market saturation.Cont….
custom duty. excise duty. stamp duty and other 39 .IMPACT OF GOVERNMENT POLICIES q Earlier license fee on fixed line was exempted 12/07/2010 q Bundling of fixed line wire q mobile number portability q Spectrum charge – allotment of radio frequency q Octroi .
12/07/2010 40 . q Services should be more quick for customer satisfaction.SUGGESTIONS FOR IMPROVEMENT q Excessive non executive employees should be given voluntary retirement or should be continued on contractual basis.
Cont… q Awareness of services and their cost for subscribers is essential to promote the higher utilization of the provided services. q Reexamination of present design of subsidization. 12/07/2010 41 . q Need improvement in its marketing strategies.
in 12/07/2010 42 .in q Trai.gov.in q Bsnl.BIBLIOGHRAPHY q Dot.co.
CONCLUSION Till date there has been no ultimate substitute of wire line services giving the full satisfaction to its customers. Though the wire line service is reducing at a very fast pace. but it will not vanish completely in the coming future. 43 12/07/2010 .
Thank You 12/07/2010 44 .
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