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BSNL FY09 Profit Down 30 Times, Restructuring Plans, 3G Tender, WiMAX

bsnllogoBSNL employees are observing today as Anti-Disinvestment day, protesting against the government’s plan to sell minority stake in the telco, domain-b reports.

BSNL is in hardship, with net profit for FY09 falling 96.5% to Rs. 1.04 billion and revenues showing an 8.1% drop in revenues to Rs. 349.37 billion compared to last fiscal. Profits dropped due to higher staff costs, WSJ reported. Over the past four years, BSNL has suffered a plummet in net profits, from Rs. 89.39 billion in 2005-06 to Rs. 30.09 billion in 2007-08.

The equity sale could bring in much needed cash and the IPO would be the first step in privatising and improving efficiencies at BSNL.

6.3M Landlines Surrendered, Rev Down 20.65%

landlineRevenues from wireline segment fell 20.65% to Rs. 11.5 billion in 2008-09. The company has been struggling with the problem of landlines being surrendered for years now, with increasing popularity of mobiles, competition and its own service levels falling below customer expectations. In the past three years, 6.3 million landlines have been surrendered and this year notches 342,000 already, Business Standard reports.

Restructuring Measures To Tackle Downfall

BSNL has hired market research body IMRB to study and offer solutions to check its plummeting landline subscriptions, and Boston Consulting Group to advice it on boosting sales revenues. BCG has suggested the company divide into separate marketing, sales and customercare divisions. Last year, MTNL and BSNL announced a list of measures to retain landline connections, which can be read here. The measures outlined: increasing of the broadband network and introducing Value Added Services like Voice over IP (VOIP), Games on Demand, IPTV, SMS etc for promoting the land line services. The other, more generic, involved introducing alternate tariff plans, though it is already providing landline services below cost. We wonder why it hasn’t ocurred to BSNL to consider improving its customer service?

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BSNL plans to share towers and passive infrastructure such as the country-wide optical fibre backbone it owns with other telcos and ISPs to improve revenues. Apart from this, Business Standard reports that BSNL has also sought exemption from paying licence fees citing a clause in the telecom policy which does not require state owned telcos to do so. It has been paying Rs. 30 billion per year as telecom license fees.

The company recently partnered with NTT DoCoMo to offer enterprise solutions. It plans to do so with other international companies such as Cable & Wireless, British Telecom and PCCW Hong Kong.

On the 3G Front

Observing a feeble response to 3G by Indian cellphone users, BSNL decided to take MTNL’s route and tie up with private operators to run 3G services for the next 10 years on a revenue sharing basis, Economic Times reports. We found MTNLs tender to be rather unattractive for applicants, given the special conditions involved, but if you add BSNL to the mix, and offer a company a pan India base, it just might work as a bait; there’s no tender from BSNL yet, though.


May-09: 8.3Mn GSM Connections Added; 89,710 BSNL Connections Dropped
ROK & BSNL To Launch Mobile TV; Regional & Movie Channels Offered
Raja Speak: BSNL Listing, No Merger; 3G Auction-Inaction; Rs. 0.10 Local Call

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