Will $1-b BSNL outsourcing deal impact 30,000 jobs?

Bharat Sanchar Nigam (BSNL) is planning to outsource the management and maintenance of its towers and cable networks to compete more effectively with private players like Bharti Airtel and Reliance Communications, which dominate the booming industry and also unlock the value of its assets, reports the Economic Times.

The deal, which could be worth more than $1 billion (Rs. 5,000 crore) over the next five years, might receive stiff resistance from about three lakh employees as it will impact close to 30,000 jobs. "The company plans to train and redeploy a significant section of these employees to marketing roles," informed two executives requesting anonymity, as many employees are expected to be transferred to the IT firms that win the outsourcing deal.

Through this deal, BSNL will outsource more than 50,000 towers and over one lakh kilometers of optic fibre cable. "The telecom company is in process of finalizing tender conditions for inviting bids for the contract," said these executives.

"The move will help BSNL unlock the value from its towers and passive infrastructure as the once monopoly tries to play catch up with private rivals," said BK Syngal, Senior Principal, Dua Consulting.

"Successful bidders for this contract can share company's networks with private players for a fee and this could result in a revenue boost for BSNL," added Syngal, who is also a former Chairman of VSNL (now Tata Communications).

Reliance Communications had formed a joint venture with Franco American networks major Alcatel-Lucent last year and outsourced the management of its GSM and CDMA networks and infrastructure such as optic fibre cable in a deal worth $500 million over a five year period. The deal had crossed $750 million mark in July 2009.

Bharti Airtel also entered into a $500 million joint venture with Alcatel-Lucent to manage its landline and broadband business in April 2009. Around 4,000 Airtel employees were transferred to this new venture, which is a front runner to bag another $500 million contract from Airtel to manage and maintain its 80,000 kilometers intercity optic fibre cable network.

BSNL had recently postponed plans to hive off its towers and other related infrastructure into a separate company. The company felt it would be difficult to unlock value by merely hiving off its infrastructure and listing it due to falling valuations for the tower sector, said the executives.

Agencies/Economic Times

Samsung partners BSNL, MTNL for 3G services

Korean electronic major Samsung said it has partnered state-run telecos BSNL and MTNL to provide high-end handsets for their 3G services and is looking at up to 45 per cent of its total sales being generated from multimedia and touchscreen phones.

"We have partnered BSNL and MTNL to promote 3G services in India. We are currently giving a special bundling offer for BSNL consumers on our select handsets for 3G services," Samsung India Electronics President and CEO Jung Soo Shin said.

He said, "We have also provided handsets to MTNL to offer 3G services in Delhi."

Samsung today launched an 8 megapixel touchscreen, 3G enabled phone 'Ultra' priced at Rs 27,500 in India. The handset is capable of offering speedy internet access, video telephony, streaming and multimedia services.

"Samsung already has four touchscreen phones available in the Indian market, all of these are 3G enabled," Shin said.

"We are looking at touchscreen and multimedia phone portfolio to contribute 40-45 per cent of our total sales by the end of the year," Samsung Telecom Division Country Head Sunil Dutt said.

Agencies

BSNL rolls out Internet TV services

Bharat Sanchar Nigam Ltd on Wednesday launched its Internet Protocol Television services, which will enable consumers to watch TV channels using their fixed telephone line at home.

The company has launched the service in 10 cities, including Gurgaon in Haryana.

IPTV is a system where an interactive digital television service is delivered over a broadband connection instead of the traditional way of transmitting through a cable network.

Users will also get new services such as video on demand where they can watch their favourite movies for a fee. They can also pause, fast forward and rewind live and recorded content stored on a remotely located server by the service provider.

Since IPTV delivers TV channels in digital form, the quality of TV viewing is expected to be much better as compared to analog transmission.

Broadband link

To avail the service, subscribers will have to take a broadband connection from BSNL and a set-top box for an upfront payment of Rs 2,500. In addition, subscribers will have to pay Rs 280 each month for receiving all 150 channels and Rs 200 for 95 channels.

BSNL launches low-cost mobile phones for rural subscribers

In comparison, DTH subscribers pay over Rs 300 a month for receiving all the channels.

In 98 cities soon

Kuldeep Goyal, Chairman and Managing Director, BSNL, said the company plans to roll out IPTV services to 98 cities by end of the current fiscal year. He also said that this will enable BSNL to tap into the growing broadcasting sector.

BSNL has partnered Smart Digivision Pvt Ltd, a company promoted by Mahendra Nahata, Chairman, Himachal Futuristic Communications Ltd, to roll out the service in 54 cities.

Goyal said that BSNL will launch its 3G services over the next two months starting from Chennai.

The Smart TV Group, consisting Smart Digivision Pvt Ltd and Smart Broadband Services Pvt Ltd, has entered into long term contracts with MTNL and BSNL for providing co-branded interactive video services in 54 cities.

Source: Agencies