BSNL, MTNL post operating profit in first half of FY21

 State-owned Bharat Sanchar Nigam Ltd (BSNL) and Mahanagar Telephone Nigam Ltd (MTNL) turned positive on the earnings before interest, tax, depreciation and amortisation front (Ebitda) in the first six months of the current financial year, according to a statement from the department of telecommunications (DoT) on Monday.

BSNL reported an Ebitda, which measures a company’s operating performance, of ₹602 crore for the six months ended September, compared with an operating loss of ₹3,596 crore a year ago. MTNL recorded an Ebitda of ₹276 crore in the first half of this fiscal versus an operating loss of ₹549 crore year-on-year.

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The government said cost-reduction measures such as sharp cut in wages and implementation of voluntary retirement scheme (VRS) opted by 92,956 employees of BSNL and MTNL combined helped improve the performance of the two companies.

“Employees of both PSUs—BSNL (78,569) and MTNL (14,387)—who opted for VRS have retired on 31.01.2020. The salary expenditure in BSNL and MTNL has reduced by around 50% (approximately ₹600 crore/month) and 75% (about ₹140 crore/ month), respectively," the DoT said in the statement.

In October 2019, the government had announced VRS, among other measures, as part of the revival plan of BSNL and MTNL. The plan included capital infusion of ₹20,140 crore by the Centre to meet the cost of spectrum for BSNL’s 4G roll-out. In addition, it will also bear the goods and services tax (GST) amount of ₹3,674 crore on the spectrum cost.

“The process for spectrum allocation for 4G services to BSNL on pan-India basis including Delhi and Mumbai has been initiated and funds have been provisioned in FY21," DoT said.

MTNL and BSNL are expected to monetise assets worth ₹3,000 crore during the current financial year, following a fund-raise of ₹1,830 crore in FY20, the statement said. “BSNL and MTNL have raised funds from the market to restructure the existing high-cost debt."

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In a year when dependency on telecom services ballooned as millions logged in from their homes for work, education, entertainment and other services amid the covid-19 pandemic, India’s tele-density touched 86.37%, while that in rural was 58.85%, according to DoT.

India has the second largest telephone connections in the world. The number of telephone connections rose to 1.17 billion as on 30 October, of which 1.15 billion are mobile subscribers, the statement said.

The number of internet subscribers was at 776.45 million at the end of September and total broadband connections reached 726.32 million. “This has accelerated the growth in internet traffic, with wireless data usage being 75.21 Exabytes during January-September," it said.

The cost of data has also reduced substantially to ₹10.55 per GB (gigabyte), enabling affordable internet access to millions of citizens.