BSNL is rolling out its 4G network. But why is it important for TCS?

telecom

Indian Market
by 5paisa Research Team Last Updated: 2022-09-30T10:53:00+05:30

Even as companies like Bharti Airtel and Reliance Jio get ready to launch their 5G services, state-run Bharat Sanchar Nigam Ltd (BSNL) is looking to launch its 4G services, with an arm of Tata Consultancy Services (TCS) set to set up its network. 

A report in The Economic Times newspaper said that the two companies have ironed out their differences over pricing, and that the BSNL 4G network could be in place soon. Earlier news reports had said that BSNL plans to launch nationwide 4G services by 2024. 

How many customers does BSNL have?

The state-run telecom company serves around 111 million mobile subscribers across the country. 

But why is this deal important given the fact that 4G is now old technology and India is moving into 5G?

This deal is important because it paves the way for the Tata group–led consortium to emerge as India’s first indigenous telecom network solutions provider in a market dominated by global majors.

A successful rollout of BSNL’s 4G network could propel India into a coveted club of countries — such as the US, Sweden, Finland, South Korea and China — that have developed telecom network technology. The market is dominated by the likes of Sweden’s Ericsson, Finland’s Nokia and China’s Huawei, while Korea’s Samsung is also emerging as a key player.

Which arm of TCS is likely to make the equipment?

Tejas Networks, a unit of Tata Sons, which is the parent company of TCS, is expected to locally manufacture the network equipment for BSNL.

The Centre for Development of Telematics (C-DoT), a government-owned telecommunications technology developer, has partnered with TCS to develop a core 4G solution as well as radio equipment.

So, what more can potentially come out of this alliance in the future?

Analysts reckon that a local 5G network solution also being developed by the Indian combine can place it in contention for a share of the $500-billion international telecom equipment market.

Once the 5G solution is tested, it will also allow TCS and Tejas Networks to take their offerings to private telcos in the country as well as to global operators, the ET report said citing DD Mishra, senior director at Gartner.

Why has BSNL been so far behind in launching 4G services?

Loss-making BSNL has been planning to launch 4G services since 2019 but in 2020, it was forced to cancel a tender due to restrictive conditions for domestic firms. Subsequently, it was directed to only utilise equipment from domestic companies.

How will this launch help the government?  

The government has pegged the launch of 4G services as key to the struggling telco’s efforts to compete better with private sector rivals such as Reliance Jio and Bharti Airtel and revive operations.

But did BSNL not get a bailout recently?

Yes, and in fact the deal comes in the wake of the Rs 1.64-lakh bailout package for the carrier, which includes grant of spectrum, 4G launch and funding of operations and capital expenses, among other elements.

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