Having lost nearly Rs 1 lakh crore in valuation over the last decade, Bharat Sanchar Nigam Limited (BSNL) can take some solace in building on its subscriber base when rival operators, barring Reliance Jio, continue to bleed users.
Data released by Telecom Regulatory’ Authority of India (TRAI) shows that BSNL was the only telecom service provider after Jio to witness an addition in subscriber base in October 2018. BSNL added 3.66 lakh customers to take total subscribers to 11.34 crore, while rivals like Vodafone Idea lost 73.61 lakh, Bharti Airtel 18.64 lakh, Tata Teleservices 9.25 lakh, MTNL 8,068 and RCom 3,831 customers in the same month. Mukesh Ambani-led Jio however, added more than a crore customers on its own.
The data also showed that BSNL has reported a 15.32 percent drop in Adjusted Gross Revenue (AGR) in the quarter ended September 2018 — the highest after RCom and the only other company to post double-digit de-growth in revenues. Worse is that multiple estimates have shown that the company’s loss is likely to cross Rs 9000 crore in the current fiscal year ending March 2019.
The state-run firm has consistently been unable to put its financial status in order. The last time the state-run firm had tasted profit was a decade ago in 2008-09 when it earned Rs 575 crore. Aside from stiff competition and falling tariffs, excess manpower and rising employee expenses are bleeding the company. Currently, almost 60 percent of its revenue goes into salaries, which is in sharp contrast to private players who have to shell out only around 5-10 percent. However, things may improve as the company has recently adopted an outsourcing model to check staff costs and nearly 40 percent of employees are set to retire in the next three years.
Meanwhile, while the company’s customer market share may have improved to 10.47 percent at the end of September 2018 from 8.65 percent in March 2015, analysts say it has miles to go before it approaches earlier highs of 20 percent recorded in 2009. BSNL has set itself the goal of increasing this figure to 12 percent by the next financial year.
The telco, which hopes to turn profitable in FY20, has a two-fold task: gaining market share while protecting revenues and turning profitable by devising a strategy to make the best use of its widespread infrastructure assets. That still looks like a tall order for the ‘incipient sick’ firm given that its financials have only deteriorated over the years.―New Indian Express