Financial woes continue for state-owned telcos

13 Dec 2018

State-owned operators Bharat Sanchar Nigam Limited (BSNL) and its smaller sister firm Mahanagar Telephone Nigam Limited (MTNL) have reported widening net losses, the Economic Times writes, citing statements from Telecom Minister Manoj Sinha to parliament. According to the official, BSNL registered net loss of INR79.92 billion (USD1.11 billion) for the year to 31 March 2018, compared to a net loss of INR47.93 billion in the previous financial year. Mr Sinha did not offer a reason for the decline, but went on to say that the company has an ongoing mobile expansion project that ‘envisages introducing 4G services in BSNL’ and will also improve GSM capacity, as well as coverage and data services.

Regarding MTNL, meanwhile, the official told the assembly that the company’s losses were due to the ‘huge legacy staff cost’ whilst service revenues were falling ‘due to intense competition resulting in cut-throat tariffs [and the] inability of MTNL to infuse capital expenditure to upgrade its network’. Mr Sinha went on: ‘All private telecom operators are offering 4G services leading to churn in mobile segment of MTNL. Due to this, MTNL’s revenue from operation has reduced.’ The operator – which serves the Delhi and Mumbai circles – registered a net loss of INR8.59 billion in the three months to end-September 2018. Turnover for the period was INR6.21 billion but employee costs accounted for more than 90% of that figure at INR5.73 billion.