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Home > Business > Business Headline > Report

Rural 'black' magic leaves BSNL spellbound

Hemangi Balse in Mumbai | April 09, 2003 12:05 IST

The state-owned Bharat Sanchar Nigam is facing a new predicament. On one hand its market share of cellular services under CellOne is steadily growing, while on the other its brand value is being eroded thanks to a flourishing blackmarket in rural India.

The corporation, which planned to capture 50 per cent of the cellular market when it launched its pre-paid cellular services, ExCell, across 17 states, has lately been receiving complains of massive black marketing from small towns and villages.

The modus operandi for black marketeers is simple: create an artificial scarcity of SIM cards and demand a high premium, sometimes as high as Rs 50 for a SIM card.

A few retailers are even charging for supplying SIM cards under "home delivery".

A senior official with BSNL said, "We have been receiving complaints of retailers charging hefty premium for our ExCell pre-paid cards. This is charged by retailers and not by BSNL which is very transparent in its marketing and other operations."

While confirming that there were shortage of cards, BSNL executives said: "There were some shortages of SIM cards earlier. But there is no problem now. Wherever we have received complains, we have supplied sufficient number of SIM cards."

But senior BSNL officials point fingers at the humungous operations required to reach the masses across 850 cities in India.

"It is a mammoth task to sell SIM cards in small cities and towns. We have a large distribution network which encompasses Indian

Railways, state and national highways besides almost all the tourists and religious places in the country," they said.

Although BSNL's is sure of checking this black marketing, it has attracted "negative publicity". "It is the wrong doings of the retailers which are not under our control. We have adviced our distributors to keep a check on this artificial scarcity of SIM cards but it would take some time," BSNL executives said.

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