Ailing state-run telecom player BSNL expects Rs 5,000 crore revenues annually from the planned asset monetization of its land and buildings and does not see any problem in managing the expenditure till June.
The asset sale is part of the revival plan being considered by the Department of Telecommunications (DoT).
“Under BSNL’s revival plan, the government is considering allotment of 4G spectrum to BSNL and offering a lucrative VRS which will be given to the willing employees. Laying off employees is not at all under consideration,” BSNL chairman and managing director Anupam Shrivastava told DNA Money.
The asset monetization is also being considered actively by the government, he said. According to BSNL’s own estimates, once real estate monetization plan is given a green signal, it will bring in a minimum of Rs 5,000 crore revenues, he said.
BSNL, which has a huge employee base of 1.76 lakh, was unable to pay salaries for February on time. Its private-sector rivals, on the other hand, have around 20,000-25,000 people on each of their payrolls.
“The worst is behind us. The silver lining is that the decline in revenues has stopped; it has started looking towards North. Only Reliance Jio and BSNL have been adding users and increasing their market share. We are seeing positive signs. The focus is back on the revival of BSNL through various measures,” Shrivastava said.
According to a report by the Telecom Regulatory Authority of India (Trai), the market share of BSNL has increased from 9.44 % in March 2018 to 9.76% January 2019. Between December and March, the company has achieved two million monthly average gross connections. Its total new gross connections were 2.1 crore in the last financial year.
It also leased out about 13,500 towers till date to other operators, which brought in additional revenue of about Rs 676 crore last fiscal. Around 7.2 lakh new landline connections were provided in last fiscal with 80,000 in March itself. Also, around 90,000 new broadband connections were also given by BSNL last month, according to numbers from BSNL.
DoT has already ask
If employee expenses are rationalized by various mechanisms including VRS and support by the government, we will be a dividend paying company, Shrivastava said, adding that BSNL has paid around Rs 1,65,000 crore towards salary since its formation. “The PSU is sitting on a gold mine but salaries are the biggest expenditure and are pulling BSNL down.”
Employee costs form around 55-60% of the public sector undertaking’s expenditure.
When asked if the company could not foresee a delay in salaries, he said, “Cash flow crunch can come into any business. From the revenues of March, we were able to pay salaries for two months – February and March. Prior to this, our cash inflow was able to match cash outflow but February became an issue.”
In March, the company got bulk of revenues for its enterprise business and a comfort letter for raising soft loans of about Rs 3,500 crore. “Till June, we will have no problem in managing the expenditure,” he said. BSNL is also expecting a payment of about Rs 2,900 crore from stuck government projects in April and May.
According to an official from DoT, the preparations for a Cabinet note for approval for VRS have already started, though clearance can only come once the new government takes over after the General Elections. Prior to this, it would need the approval of Digital Communications Commission (DCC), earlier Telecom Commission, the highest telecom policymaking body of the DoT.
Telecom department secretary Aruna Sundararajan along with senior officials has been meeting BSNL management every day to resolve the issues at the earliest.
The Rs 6,500 crore VRS proposal, pending since 2011, is critical to the long-term survival of BSNL, which has seen its financial position deteriorating.
BSNL was incorporated in the year 2000 out of DoT and was once the number two mobile player. It posted a profit of Rs 10,000 crore around 2005, it recorded a loss of Rs 8000 crore last year.―DNA India