BSNL Expects Loss To Narrow To Rs 7500 Crore In FY19
On the back of several cost-cutting measures undertaken, the ailing telecom PSU company BSNL is expected to narrow its losses to Rs 7500 crore for the fiscal year ending March 2019.
It had posted a loss of Rs 8000 crore for the year ended March 2018, and Rs 4793 crore in the year-ago fiscal.
For the first time, the company recorded a 50% increase in its enterprise business revenues at Rs 6,500 crore during 2018-19. The company, however, has not officially announced the financial numbers.
The market share of BSNL has increased from 9.44 % to 9.76 % (all India level) from March 2018 to January 2019, as per TRAI numbers.
BSNL has been able to save Rs 2500 crore last year as it froze employee expenses, curtailed medical and other administrative costs. Out of the Rs 2500 crore annual savings, around Rs 625 crore came from employee benefits.
Owing to a huge employee base of around 1.76 lakh with annual expenses of Rs 15,000 crore, BSNL has been struggling to manage its financials for the past several years. The heightened competitive intensity has impacted the overall telecom industry, leading to a decline in margins and triggering a consolidation phase. BSNL’s employee costs account for 55-60% of the total expenditure.
The company delayed the payment of employees’ salaries in February, which created a huge issue with elections round the corner. This incident has put the focus back on the revival of BSNL, which has sought equity infusion of around Rs 7000 crore towards the allotment of 4G spectrum and approval for a voluntary retirement scheme (VRS) at around Rs 6500 crore.
The DoT has already asked TRAI for its views on allotment of 4G spectrum to BSNL without auction. The revival plan is expected to come up for Cabinet approval only after the new government takes over in June.
“The worst is behind us. The silver lining is that the decline in revenues has stopped; it has started looking towards the 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 revival,” BSNL chairman and managing director Anupam Shrivastava said.
Since the formation of BSNL, we have paid around Rs 1,65,000 crore towards salary. The PSU is sitting on a gold mine but salaries are the biggest expenditure that is pulling BSNL down, he said.
BSNL is expecting a payment of about Rs 2900 crore from the stuck government projects in April and May, revenue accruals from enterprise business and a soft loan of around Rs 3500 crore. All of these together will enable BSNL to sustain itself till June.
- Rs 6500 cr – Enterprise business revenues during 2018-19
- Rs 2500 cr – Co saved after curbing various expenses
- Rs 15,000 cr – Telecom co’s annual expenses
- Total revenues is expected to come down to Rs 22,000-Rs 23,000 crore in the last fiscal from Rs 25,000 crore in 2017-18
- BSNL has sought equity infusion of around Rs 7,000 crore towards the allotment of 4G spectrum―DNA India
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