In this paper an attempt is made to analyze customer satisfaction and its impact on customer loyalty of BSNL mobile users. Customer satisfaction metric is very useful in managing and monitoring the businesses. The importance of customer satisfaction cannot be dismissed because happy customers are like free advertising. Customer loyalty is the result of consistently positive emotional experience, physical attribute-based satisfaction and perceived value of an experience, which includes the product or services. In recent years the BSNL revenue and market share plunged into heavy losses due to intense competition in the Indian telecommunications sector.