BSNL unable to compete with pvt telcos without 4G, 5G services, check tariff hike

State-run BSNL is unable to compete with private telecom operators in the absence of 4G and 5G services due to which there is no restraint on mobile service providers from raising tariff, BSNL Employees Union said on Tuesday. BSNL Employees Union in a letter to the union communications minister Jyotiraditya Scindia said that the recent tariff hike by the private telecom operators Reliance Jio and Bharti Airtel is unwarranted as they are profitable companies.

"Earlier, due to the competition from BSNL, the private telecom service providers were restrained from increasing their tariffs capriciously. However, the scenario has changed now. BSNL has not been able to launch its 4G and 5G services till date, as a result of which it is handicapped from competing with the private operators and thereby restraining their arbitrary tariff hikes," the letter said.

Recently, all three private operators announced an increase in mobile service rates in the range of 10-27 per cent.

While new tariff plans announced by Jio and Airtel have come into force, Vi hike will be effective from July 4.

Jio raised tariffs after a gap of about 2.5 years while Airtel and Vi raised entry-level tariffs within one-and-a-half years.

The union said that the claim of telecom operators that the tariff hike has been done to increase average revenue per user (ARPU) is misleading.

"Absolutely there is no reason for the private companies to raise their tariffs so steeply. It is important to note that, Reliance Jio has made a net profit of Rs 20,607 crore in 2023-24 and Airtel has made a net profit of Rs 7,467 crore during the same period. Hence, such a steep tariff hike, which will hurt the common people, is totally unwarranted.

The union said that in the absence of 4G and 5G service, the state-run firm has been losing customers while private operators, Reliance Jio and Airtel, are gaining new customers.

BSNL EU said that the government's decision not to allow BSNL to upgrade its existing 3G BTSs into 4G BTSs, through software upgradation as well as barring the public sector firm from procuring 4G equipment from global vendors has handicapped the company.

"BSNL is barred from procuring standard 4G equipment from global vendors such as Nokia, Ericsson and Samsung, at par with Reliance Jio and Airtel. 

Instead, BSNL is compelled to procure its 4G equipment only from indigenous equipment manufacturers, which has greatly delayed BSNL's 4G, as well as 5G service launchings," the letter said.

The union said that former telecom minister Ashwini Vaishnaw in May 2023 had said that BSNL will launch its 4G service in a few weeks and the same would be upgraded to 5G by December but still the state-run firm has not been able to launch 4G service.

"We would like to earnestly appeal to you sir, that necessary steps may kindly be taken expeditiously to ensure BSNL's 4G launching without delay. Further, timely upgradation of this 4G service into 5G service, would enable BSNL to protect the interests of the common people of this country from the tariff hikes of profit-hungry private telecom service providers," the union said.

According to government sources, BSNL has rolled out 4G services in Punjab using indigenously developed technology by a consortium led by IT company TCS and telecom research organisation C-DoT and has onboarded 8 lakh subscribers.

In May the source shared that BSNL is preparing to launch its highly anticipated 4G services across India starting in August.