INDIA BUSINESS WORLD - OCTOBER 2006
THE MONTH THAT WAS...

BSNL CUTS STD RATES TO RE 1/MIN

  It's bonanza for BSNL subscribers. The telco's users in urban areas will be able to make STD calls at just Re one per minute, a reduction of 60% over the current charge of Rs 2.40 per minute.

   BSNL is refurbishing its OneIndia plan by reducing monthly rentals to Rs 180, bringing them at par with the average rentals in urban India.

   Analysts say the move would be a masterstroke as users will lap up the plan because there would not be any change in rentals. With this reduction, BSNL hopes to register a 65% to 68% increase in its STD traffic. Currently, STD accounts for only 25% of the company's Rs 39,000 crore annual revenue. If the traffic increases by 65%, the revenue will rise substantially, more than making up for the reduction in rentals.

   The PSU's board met on Wednesday evening to finalise the new OneIndia plan. BSNL CMD A K Sinha will make the announcement in Delhi on Thursday as part of the company's festive season offer.

   According to sources, the aim was twopronged. First, to rope in more landline subscribers and second, to boost communications minister Dayanidhi Maran's dream project, OneIndia, which offers local as well as national calls at Re one per minute.

Currently, users opting for BSNL's OneIndia plan for landlines have to pay fixed monthly charges of Rs 225, which is higher than the average rental of Rs 180.

“OneIndia has failed to take off despite various attempts by BSNL, largely due to high rentals. Reduction in fixed charges is expected to give it a push,” sources said. Consider the figures: The company has under 0.5 million OneIndia users, which is just 1.14 % of its total fixedline base of 37 million.

In July too, the telco had slashed fixed charges from Rs 299 to Rs 225 per month. This was accompanied by the introduction of 25 free calls. “BSNL will also be increasing the number of free calls from the current 25 to 50 under OneIndia,” company sources confirmed.

BSNL has over 1.5 crore fixedline users in urban areas. If the telco is able to rope general users for OneIndia, it will give a substantial push to the plan, which was launched with much fanfare in March this year.

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