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BSNL posts Rs 7,085 Cr loss in FY14; Landline biz loss up, Revival plans

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State owned telecom operator BSNL continues to make losses, although it is improving: a loss of Rs Rs 7,085 crore for the financial year 2013-14 (FY14) as compared to Rs 7,884 crore loss in FY13 and Rs 8,851 crore loss in FY12.

This was disclosed (docx, Hindi) by the Minister of Communications and Information Technology Ravi Shankar Prasad in response to a question in the Rajya Sabha. Remember that BSNL is an unlisted company, unlike the other state owned telco MTNL.

This is BSNL’s fifth straight loss making fiscal and the telco had last reported a profit in the fiscal FY09, where it had reported a profit of Rs 575 crore. In subsequent years, it has reported losses of Rs 1,823 crore in FY10 and Rs 6,384 crore in FY11.

BSNL revenues: While the minister hasn’t disclosed BSNL’s revenues for the fiscal, Prasad mentions that BSNL’s operational revenues has declined by 11.67% in the past five years. Note that BSNL hasn’t updated its revenue information on its site since FY12 and the last known information is Rs 19,305 crore for the nine month period ending December 31, 2012, as disclosed by the then Communications & IT Minister Kapil Sibal in April last year.

Landline connections dropped by 38.04% in 5 years

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Prasad mentions that BSNL posted a net loss of Rs 14,979 crore in its landline business for the fiscal, a significant increase from Rs 13,445 crore in FY13 and Rs 12,669 crore in FY12.

In response to a separate question (docx, Hindi), Prasad mentions that BSNL’s landline connections have declined by 38.04% during the period March 2009- May 2014 while MTNL’s landline connections have reduced by 1.14% in the same period.

It’s worth noting that BSNL and MTNL together hold 77% share of the total wireline market. BSNL had reported 18.18 million wireline connections as of May 2014, down from 18.36 million connections in April 2014, as per the latest TRAI numbers (pdf).

Prasad mentions that BSNL has taken several steps to improve its landline business. These include:

– Migrating to Next Generation Network (NGN) from Public Switched Telephone Network (PSTN) in the current five year plan, so as to provide better value added services like Personalized Ring Back Tone, Broadband VAS, Multi Media Video Conferencing, Wide area Centrex and Voice over Internet Protocol (VOIP) services among others.

– Redeploying workforce with more focus on sales, distribution and customer care activities. A channel management team consisting of 4,500 exclusive sales representatives has been setup to strengthen its sales and marketing team.

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– Call Detail Record-based billing has been introduced along with commercial & fault repair service.

BSNL’s mobile subscriber market share: Prasad also added that BSNL’s mobile subscriber base has reduced to 10.95% as of May 2014, from 14.87% as of March 2009. On the other hand, MTNL’s market share has declined to 4.83% from 10.87% in the same period.

As per the latest TRAI numbers (pdf), BSNL had 91.61 million connections as of May 2014, down 1.7% from 93.19 million connections in April 2014.

Plans For BSNL revival

Prasad mentions that the Indian government has taken several measures to revive BSNL and MTNL. These include:

– Financial support of Rs 6,724.51 crore to BSNL and Rs 4,533.97 crore to MTNL on surrender of BWA spectrum in January this year.

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– Waiver of a Rs 1,411 crore loan provided by the government to BSNL.

Besides this, the government is apparently formulating a co-ordinated plan which aims to improve capital availability for network expansion and improvement in Quality of Service (QoS), by exploring opportunities to utilize the existing assets and addressing issues like high employee expenses.

BSNL is also apparently preparing a separate revival plan for increasing its revenue potential and restructuring its organization to make it customer-centric with a focus on marketing and customer services.

Recent developments at BSNL

– In June this year, BSNL had introduced Facebook and WhatsApp data bundles in the north zone. This has also been extended to the South Zone later earlier this month, as indicated by a Telecom Talk report.

– BSNL had announced a bundle plan for Pantel’s Java-based Bharatphone, which has apparently been designed for e-governance applications. It had also partnered with the recently IPO’d Datawind to provide 12 months of free Internet on UbiSlate 7Cz and UbiSlate 3G7.

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– BSNL had appointed A N Rai as the interim chairman and managing director last month. He took over from RK Upadhyay who retired on June 30, 2014.

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