NEW DELHI: State-owned telcos, BSNL and MTNL, will not see any turnaround this fiscal and will continue to bleed with falling revenues and wider losses, the companies indicated in their performance reviews withtelecom minister KapilSibal on November 16.
MTNL, which operates in Delhi and Mumbai, has told Sibal that its losses for the first six months this fiscal has increased to Rs 2,153 crore, up 26 per cent, when compared to a loss of Rs 1,714 crore for the six months ended September 2011.
MTNL, which operates in Delhi and Mumbai, has told Sibal that its losses for the first six months this fiscal has increased to Rs 2,153 crore, up 26 per cent, when compared to a loss of Rs 1,714 crore for the six months ended September 2011.
Unlisted BSNL, in its presentation has said its estimates indicate that its revenues for the year-ended March 2013 would be around Rs 25,384 crore, down 9 per cent as against Rs 27,944 crore during 2011-12.
ET reviewed a copy of the presentations made by both public sector communication undertakings to Sibal.
This is despite a series of steps that both these companies have put in place recently, including monetising real estate assets, to arrest the downward spiral in revenues and profits. For the year-ended March 2012,MTNL and BSNL had posted losses of Rs 4,108 crore and Rs 8,851 crore, respectively.
MTNL chairman and MD AK Garg said the company's losses at the end of this fiscal may be similar to that of last year, and added that the financials would improve significantly if the government refunds the Rs 4,600 crore it had paid up for fourth generation (4G) airwaves before March next year.
He also dismissed market buzz that the debt-laden company would soon run out of finances to meet employee salaries, even as he admitted that the situation was 'tough but manageable'.
BSNL, once a monopoly in domestic telephony, has been deteriorating in financial performance over the years as it could not expand on time. Its business plans were thwarted at various levels of bureaucracy under influence from different quarters.
It could not compete with the nimble-footed private mobile phone firms such as Bharti Airtel which were taking decisions quickly. The telco's chairman and MD, RK Upadhyay, pointed out that the company had placed its first orders for mobile equipment since 2007 only recently, and added that more tenders for expanding its cellular networks would be issued soon, the results of which would reflect in the next financial year.
Upadhyay further said that the company had taken a slew of steps to increase revenues including hiving off its towers into a separate company, a move that BSNL estimates will bring in Rs 1,600 crore over the next five years, as well as leasing its CDMA network, and rolling out WiFi networks or hotspots across the country, which it estimates will being in about Rs 500 crore in the first year and double this from the second year onwards.
"All these will begin to show only from next year. We have also simplified the procurement procedures for equipment. Once the orders are placed, our numbers will improve," he added.
Upadhyay also added that the current fiscal would be about 'tightening spends and increasing productivity. His presentation to Sibal indicates some amount of success on these fronts as BSNL has reported growth in all key revenue parameters in the first seven months to October 2012.
Upadhyay also added that the current fiscal would be about 'tightening spends and increasing productivity. His presentation to Sibal indicates some amount of success on these fronts as BSNL has reported growth in all key revenue parameters in the first seven months to October 2012.
For instance, wireless revenue, enterprise sales, broadband sales and outgoing minutes of usage during this period have increased by 6.65 per cent, 26.8 per cent, 8.3 per cent and 4.14 per cent, respectively, compared to the earlier year. Even VLR or 'visitors location register' numbers, that indicate the number of active users on a network, has grown 4.33 per cent during the period under review.
MTNL's case, however, offers little hope as the company has suffered higher revenue losses during the first six months to September 2012 compared to the year-ago period. Basic service revenue losses during this period widened to Rs 1,183.8 crore from Rs 1,004.9 crore, while mobile revenue losses widened over 93 per cent to Rs 324.7 crore.
