Bharat Sanchar Nigam Ltd and Mahanagar Telephone Nigam Ltd will have to cut costs by 25 to 30 per cent if they have to remain competitive, global consultants A T Kearney said.

Neil Plumridge, vice-president and head of telecom practices, A T Kearney, Asia, said: "BSNL and MTNL will have to cut costs and increase productivity even as they maintain their culture and invest in customer relations."

According to Plumridge, India's productivity in the telecom sector will double if the government ensures a level playing field and a stronger regulator.

"There is huge investment waiting to come into India but, at present, there is not much clarity on the rules of the game," he said.

For the cellular market, Plumridge said operators must aim for a 25 to 30 per cent marketshare.

"The end game will be won by operators who have the marketshare. They will be able to pull back their break-even points considerably."

Plumridge said that, in order to get the marketshare, cellular operators must have good churn management with emphasis on predictive churn, effective pricing with innovative packages, fast deployment of new services, quality of service by building trust for their brands, and a good distribution network.

Apart from this, handset will also be a key differentiation in the market.

"Indian operators need to think more about offering integrated plans where handsets are bundled with the tariff plan," Plumridge said.

On fixed line services, Plumridge said, while a major part of the voice traffic will move to wireless, data will continue to be transmitted through the fixed line.