The user will have to pay security deposits and installation charges, if any. However, he or she will get a month’s worth of services free of charge once the formalities are done.
The move comes in the wake of heightened competition in the broadband market due to the rising popularity of wireless services such as those based on 4G LTE.
BSNL, which used to provide as little as 2 GB of data per month on its wired broadband plans for around Rs 500, has been forced to cut prices or increase speed and entitlements under its plans in the last one year to withstand fierce competition.
The market has turned bloody for the state-owned company — which makes most of its profit from its wired services — as a new entrant — Reliance Jio — is offering data at comparable speeds for a fraction of the price.
Jio, as well as competitors like Bharti Airtel and Idea Cellular, offer about 30 GB of high-speed data per month for about Rs 150. Moreover, they also throw in free nationwide calls as well.
This has led to lakhs of BSNL’s customers surrendering their wired connections.
BSNL had a total of 1.32 cr landline customers as of July. However, the same month also saw 1.6 lakh landline users surrender their connections. At this rate, BSNL would run out of landline customers in less than seven years.
It is all the more worrying due to its impact on revenue and profits. While an average mobile customer generates only between Rs 100-150 per month, an average landline customer generates about Rs 800 per month, and is much more valuable than wireless users.
To keep customers back, the company recently increased the minimum speed on its broadband plans to 4 Mbps from 2 Mbps. It is also likely to increase it further to 10 Mbps — subject to technical feasibility — soon.
BSNL is unlikely to be able to compete with 4G and upcoming 5G services as the cost of running a copper network is far higher than the cost of running a wireless network.
However, the state-owned corporation, which got 4G spectrum in 2010, has still not been able to launch wireless services due to delays in deciding which business model it should adopt to launch its 4G services.