State-owned Bharat Sanchar Nigam Ltd. (BSNL) expects to get back into the black in fiscal 2018-19, helped by data growth, a steady reduction in staff costs as well as steps to monetize land, tower and spectrum assets.
Speaking to ETTelecom's Muntazir Abbas, BSNL chairman and managing director Anupam Shrivastava said has submitted 11 proposals for land monetization worth Rs 2,500 crore to the government and expects to clock Rs 2,000 crore over the next 3-4 years from renting out its telecom towers. The telco is also open for spectrum sharing and trading pacts and is in talks with private telcos to enter into ICR pacts. Edited excerpts:
Can you share the current financial status of BSNL?
In 2014-15, BSNL's top line revenue started to improve and is expected this year too. Our customer base from July has started to increase. We are up 2% (on year, in revenue) as per unaudited figures of first six months. We ended with revenue of Rs 28,500 crore as of March 2015, while losses went up sharply due to the way we calculate depreciation.
We are aiming to get revenue somewhere between Rs 30,000 to 32,000 crore in 2015-16 fiscal year with losses at less than Rs 6,000 crore.
By when will BSNL make profits?
By 2018-2019, BSNL will be back again in profits. Major reasons include growing data demand, lesser salary outgo impact and declining debt to equity ratio. We are least debt-ridden telco in the sector with less than Rs 6,000 crore debt. Our debt to equity ratio is 0.13%. Our capex and collaboration (sharing) initiatives are going in right direction.
Are you looking at any financial package from the government this FY?
No, I don't think so. Our EBIDA is positive and we are making our operational expenses by ourselves, although we have nearly 55% or Rs 15,000 crore annual outgo from revenue to meet salary expenses, whereas private operators such as Airtel has less than 5% expense on account of employees. As long as we are operationally positive, there is no need for government to infuse money.
What are your plans for voluntary retirement service (VRS) for BSNL employees?
The VRS proposal is with government and is under examination as the program will also require money to be implemented. We are not filling new positions. We have 2.25-lakh workforce currently. 10% staff goes every year by way of retirement.
Have you got the refund from the government on surrendering Wi-Max spectrum?
Rs 7,500 crore was supposed to come for Wi-Max spectrum return. It is in a form of reimbursement for license fee which is at Rs 550 crore per quarter or Rs 2,200 crore annually which is getting adjusted. We have got Rs 3500 crore so far and rest will come in the course of coming year.
What is your data strategy?
Voice is plateaued now. Data is our focus area. 450 Wi-Fi hotspots are already in place. Data is a Rs 1500 crore business for us now. In mobility, we had 8% data revenue last year and this year it has contributed 12%. On broadband front, data added 50% to our revenue last year as compared to 60% this year.
We have spectrum in 2600 MHz band in 15 service areas and this band is apt for 4G services as it has capacity building capabilities. Wi-Fi is also a direction in this area as we have huge fiber-based network. We are using Wi-Fi for 4G services additionally.
Do you have plans to expand the voice/data capacity?
From 2006 to 2012, we could not add capacity and that was the time when market was saturating. We completely missed the bus. We have now embarked on phase 7 expansion plan and invested Rs 5,500 on the mobile front, including data. We are investing 700 crore to add capacity that aims to increase additional 20 million lines in 2015-16.
Do you see recent spectrum sharing guidelines as an opportunity for BSNL?
It is time to share, collaborate yet compete. We are now ready for ICR (intra-circle roaming) agreements with private operators. Discussions with Bharti Airtel, Vodafone India and Idea Cellular and Telenor are on. Reliance Communications is enthusiastic, although we have not signed any pact yet.
We have spectrum in 1800MHz band that can be shared with private operators such as Airtel and Vodafone. In addition, we have 2600MHz of airwaves in 15 licensed service areas (LSA). The 2600MHz band ecosystem has now started to mature with China Mobile and some operators in Europe and Australia that are quite ahead in 2600MHz.
How do you see spectrum trading then?
We are open for spectrum trading although we are still waiting to get clarification from telecom department on these guidelines.
Do you agree with telecom regulator Trai mandate of Rs 1 compensation?
BSNL network is better than others. The reasons for call drops include less investment in voice networks as operators shift to data, radiation fears due to telecom towers and RoW (right of way) challenges from municipal bodies. We are maintaining a balance between voice and data and.
By when do we see BSNL hiving off its tower assets into a unit?
Cabinet decision has already come. Out of 75,000 towers, 61,000 will be transferred to new company. A committee has already been formed to look into modalities and we are expecting its recommendations on the shape of structure of new tower company by year end.
How are you looking at monetization of towers and land assets?
It has already begun. From Rs 700 crore today, we expect to clock Rs 2,000 crore in next three to four years. We have already submitted 11 proposals amounting to Rs 2,500 crore to the government. We are expecting a go-ahead to come by year end.
What are you plans in north-east and Naxal-hit areas?
Expansion of mobile services and connectivity part is a focus area in the north-east. In the nine naxalite states, government has awarded a contract to put 1,850 telecom towers for Rs 3,500 crore which is underway.
What are your initiatives to accelerate government's Digital India initiative?
One of the key objectives of Digital India is to have broadband. In line with the government strategy, we have completed a rollout of 450 WiFi hotspots as compared to an initial target of 250. We are expecting to put up 2,500 WiFi hotspots by the end of this fiscal year to facilitate digital penetration in the country in addition to our focus on tourist spots.