The Hindu : 'Limited mobility' may hit BSNL-MTNL base

Online edition of India's National Newspaper
Monday, Dec 23, 2002

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National

'Limited mobility' may hit BSNL-MTNL base

By Sandeep Dikshit

NEW DELHI DEC. 22. The entry of Reliance Telecom later this week is keeping all the existing players on tenterhooks.

Private cellular companies have been spearheading the battle against "limited mobility" which Reliance plans to simultaneously offer in 18 States. But the heat may be felt more by the Bharat Sanchar Nigam Limited (BSNL) and the Mahanagar Telephone Nigam Limited (MTNL).

The churn is likely to be felt at the high-paying individual subscriber level rather than the corporate. Cellular companies already have one crore of the well-heeled as customers. Most of them are unlikely to change sides because of the technical restrictions placed by the Government on "limited mobility".

For most of the existing cellular subscribers, the charm of free incoming calls and low outgoing tariff offered by "limited mobility" phones do not compensate the several "value added" services they are already being offered. The self-employed section might be the only one to be enticed by the "limited mobility" offer by Reliance in most of the country and the Tatas, the HFCL, Shyam Telecom etc. in other regions.

A larger portion may cross over to a rival cellular company in case of a more attractive offer as was the case with "Idea" in Delhi, which recorded nearly one lakh subscribers in its first month of operations. Most of them had defected from the other three cellular companies due to more appealing tariff rates.

Reliance is more likely to threaten the future customer base of cellular companies in small cities where they have to take the blame for being late entrants. The mass market there comprises the income-conscious customer, more because his bills are not paid by a corporate or the Government, who could opt for the cheaper "limited mobility" offer.

But the limited mobility rage is bound to affect the balance sheets of MTNL\BSNL in a manner which the cellular revolution was unable to. The public face of the cellular and limited mobility companies is the ingratiating but polite youngster on the phone or in front of the front door. Many existing MTNL\BSNL subscribers may wish to liberate themselves from the lasting memories of the help desk operator who slammed the phone, the linesman lingering for a bribe, the long line to pay bills in cash and the customer care staff sending the subscriber to the wrong premises.

The rates offered by limited mobility may give several subscribers just this latitude. The publicity that will accompany Reliance's launch will stimulate the subscriber's consciousness and limited mobility companies, including the Tatas, with a well-proven after-sales service record, could reap the harvest.

It is learnt that MTNL\BSNL may convert their fixed line customers to the limited mobility concept but analysts, familiar with the halting manner in which they launched the cellular and limited mobility ventures, could be excused for assuming a minimum time frame of at least a year. If the bureaucracy continues to dither, the high-paying individual customer could surrender her home phone and follow the migration path charted by the corporates.

If the private companies are unable to entice the upper middle class subscriber of MTNL/BSNL, it will not be for want of persuasive power. Despite seven years of operations, the private sector has not been able to establish trust in its grievance redress machinery. Thousands of wronged cellular phone subscribers have either gritted their teeth and carried on with the same company or opted for another one. Rarely has their over-billing complaint been addressed to their satisfaction. This is an area where the public sector, with its well-established norms for complaint restitution, can claim an advantage. But it is a very tenuous edge to beat back the aggressive limited mobility pack being lead by Reliance.

The warning signs are already there. Both the state-owned companies have suffered record desertions. In the last fiscal, over 13 lakh BSNL disconnections were recorded while MTNL failed to meet its target for the third straight fiscal. There are a variety of reasons for this trend. Not only will the future growth of these companies be hit, their existing base can be eroded by the approaching competition.

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