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Within A Year Of Govt's Revival Plan, BSNL And MTNL Turn EBITDA Positive; Expected To Cut Losses By 50 Per Cent In FY21
BSNL and MTNL are overstaffed, overburdened, and plain and simply uncompetitive and unviable.
Within a year of government's approving the revival package, the state-owned Bharat Sanchar Nigam Limited (BSNL) and Mahanagar Telephone Nigam Limited (MTNL) have turned EBITDA positive in first 6 months of the ongoing financial year, Ministry of Communications said in a statement on Monday (11 January).
While for BSNL, the earnings before interest, taxes, depreciation, and amortization (EBITDA) rose from minus Rs 3596 crore for half year ended in September 2019 to positive Rs 602 crore, for MTNL the corresponding figures were minus Rs 549 crore in September 2019, and the current figure is positive Rs 276 crore.
According to Department of Telecommunications (DoT) sources, both organizations are expected to reduce their losses by 50 per cent when compared to 2019-20, the statement said.
The reasons for better performance include a sharp reduction in wage bill due to Voluntary Retirement Scheme (VRS) (nearly 50 per cent workforce of BSNL and 75 per cent of MTNL was reduced).
In the mobile segment, BSNL and MTNL market share has increased to 10.36 per cent in October 2020 as per figures published by TRAI.
BSNL added over 10 million new customers during this financial year in mobile segment. This has also given fillip to Government’s Digital India drive of cashless transactions as online transactions has increased by over 43 per cent in December 2020 since last financial year, the statement said.
It may be recalled that the Union Cabinet had approved the revival package for BSNL/ MTNL in October 2019 which among other things included VRS, support for 4G spectrum, monetization of core and non-core assets, Sovereign Guarantee for Bonds to be raised by the PSUs and merger of MTNL and BSNL in the short run.
The ministry said that BSNL and MTNL have successfully raised money from the bond route. In the recent bond-offer of MTNL, the issue was subscribed more than 3 times and for BSNL more than 2 times.
