NEW DELHI: State-owned BSNL’s turnaround story is more an accounting changes than operational improvement.
The company reported Rs 271 crore profits in the third quarter, first time in 17 years. In the previous quarter, the company had posted a loss of Rs 1,267 crore.
According to detailed financial results released on Tuesday, the depreciation and amortisation cost of the company dropped 44% in the third quarter of the current financial year to Rs 814 crore against Rs 1,443 crore in the previous year.
Depreciation and amortisation costs are shown as expenses in the profit and loss statement of a company.
The reason for the sharp fall is that the company during the third quarter changed the method of amortisation of spectrum fees from Straight Line Method (SLM) to the Unit Based Amortization Method (UBAM) with effect from the beginning of the current financial year (2024-25). This change of method has resulted in a decline in value of the amortisation cost.
Additionally, the employee cost also came down by Rs 276 crore, or 13.7%, to Rs 1,735 crore in the quarter ended December 31, 2024, compared to Rs 2,011 crore in the same quarter of the previous year.
According to the auditor’s report, the obligation of the company for employee retirement benefits is short-funded by Rs 414 crore towards gratuity and by Rs 122 crore towards leave encashment.
The telecom service provider also cut down its net loss for the nine-month period ending 31 December 2024. The company’s net loss decreased from Rs 4,522 crore in the same period of the previous year to Rs 2,527 crore, representing a reduction of Rs 1,995 crore or 44.1%.
The company has reported a 9.3% year-on-year growth in revenue in the October-December quarter.
However, 20 circles have turned EBITDA positive in the third quarter of the current financial year; when compared to 12 Circles last December Quarter. Bharat Sanchar Nigam Limited (BSNL) will prioritise the rapid expansion of its 4G and 5G networks to enhance service quality and increase network reach, providing customers with faster and more reliable connectivity.