BSNL, MTNL continue to book losses

4 Dec 2014

State-backed operators Bharat Sanchar Nigam Ltd (BSNL) and Mahanagar Telephone Nigam Ltd (MTNL) have booked net losses of INR37.85 billion and INR15.67 billion (USD611.65 million and USD253.22 million) respectively in the first six months of the financial year, the Economic Times writes, citing government officials. The duo have been haemorrhaging cash for the last five years as competition from privately-owned rivals has driven down revenues, whilst costs have steadily increased due primarily to high staffing costs. The government’s recovery efforts, including taking over MTNL’s pension obligations and cutting salaries, have been greeted with some success, the smaller of the two telcos having registered a net profit of INR78.25 billion in FY2013-2014 after booking net losses of INR53.22 billion in FY2012-2013 and INR41.09 billion in FY2011-2012. Other recovery efforts have included refunding the pair for unused broadband wireless access (BWA) spectrum, which put an extra INR67.25 billion in BSNL’s pockets and INR45.34 billion in those of MTNL. In the long-term, the government is still considering merging the two operators although this plan has seen political opposition. Other proposals have suggested spinning off the companies’ infrastructure to a new company which would then lease access back to the duo, as well as the nation’s other telecoms providers.