NEW DELHI: Despite having become EBIDTA-positive last year after large-scale wage cost reductions, state-owned telecom company BSNL is expected to turn fully profitable only from financial year 2023-24, according to a report from the Parliamentary Standing Committee on Information Technology.
According to the Demands for Grants report submitted by the panel to the Parliament this week, this time-frame for achieving profitability is subject to the success of the government’s revival package. “BSNL has stated that it expects to be profitable from 2023-24 onwards, subject to full realisation of the revenue and cash flow from services as well as monetisation of land assets as envisaged at the stage of processing of the revival packagerest, tax, depreciation and amortisation,” the panel said.
In October 2019, the government had approved the revival package for BSNL and MTNL, which included a voluntary retirement scheme (VRS), support for 4G spectrum, monetisation of core and non-core assets, sovereign guarantee for bonds to be raised by the public sector undertakings (PSUs), and merger of MTNL and BSNL in the short run.
According to the report, BSNL’s expenditure has fallen from Rs 34,400 crore per annum to Rs 24,687 crore per annum mainly due to savings in wages. However, revenue has not grown mainly due to the delay in offering 4G services.
While a group of ministers (GoM) has approved allocating 4G spectrum to BSNL in Delhi and Mumbai, such services have not been begun yet. It is expected that with the commencement of 4G services, the revenue of BSNL in the wireless segment will increase.