New Delhi: The loss-making state-owned telecommunications company BSNL expects it to become profitable from fiscal year 2023/24, provided that the plans and strategies envisaged as part of the resuscitation package are implemented.
However, the public sector entity is now operationally profitable, the report said. “BSNL has stated that it is expected to be profitable from 2023 to 2024, subject to the full realization of the revenue and cash flow from services, as well as the monetization of the land assets, as foreseen at the stage of processing the resuscitation package.
“However, BSNL has turned Ebitda-positive,” said the Standing Committee on Information Technology in its report on Wednesday. Ebitda stands for earnings before interest, taxes, depreciation and amortization. In October 2019, the government approved the BSNL and MTNL Revitalization Package, which included a Voluntary Pension Scheme (VRS), support for the 4G spectrum, monetization of core and non-core assets, and the state guarantee on public sector bonds companies (PSUs) and short term merger of MTNL and BSNL.
According to the report, BSNL’s spending decreased from Rs 34,400 billion a year to Rs 24,687 billion a year, the nine-month annualized figure, mainly due to savings in employee benefit expenses due to VRS under the Resuscitation package. However, revenue has not increased mainly due to the non-launch of 4G services.
A total of 92,956 BSNL and MTNL employees retired for VRS on January 31, 2020.The proposal for the allocation of frequencies for 4G services to BSNL in Delhi and Mumbai was approved at the meeting on December 21, 2020.
With the start of 4G services, BSNL’s wireless revenue is expected to grow, the report said. BSNL had published a Rs 9,300 4G tender for the procurement of telecommunications equipment in March, but it was later canceled for several reasons. Reasons include claims by Indian companies that the state-owned company’s project does not meet preferred market access standards and leans towards foreign companies.
The company has requested a proof of concept from Indian providers for participation in the proposed 4G tender. Leading companies such as TCS, Tech Mahindra, Sterlite and L&T have purchased documents for the proof of concept. According to the report, BSNL has nearly 1,600 inquiries after the pre-bid meeting, which will be answered shortly.
“It is unfortunate to note that BSNL’s 4G service has not yet started as other TSPs (Telecom Service Providers) prepare to roll out 5G services in the country.” The committee wishes that there should be no further delay in the allocation of 4G BSNL spectrum and that they should be allowed to introduce 4G services at the earliest, “said the committee. The government has found that physical assets are worth $ 67,837 billion Rupees BSNL and rupees 17,985 billion MTNL can be monetized.
The Department of Telecommunications (DoT) told the committee that monetization was an issue over the past year as land and rental prices fell. The year 2021-22 will be crucial as the DoT hopes to monetize more real estate.
“The projected land / building monetization revenues for BSNL and MTNL over the 2021-22 period are Rs.1,200 billion and Rs.300 billion, respectively,” the report said.
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