State-owned Bharat Sanchar Nigam (BSNL) has witnessed a 33% sequential fall in its revenue from operations to Rs 4,290 crore in the April-June quarter. The decline in revenue, following three consecutive quarters of growth, can primarily be attributed to a lacklustre performance in its wireless business. On a year-on-year basis, the company’s revenue grew 8.3%.
The company’s net loss has narrowed to Rs 1,470 crore during April-June, compared to Rs 2,696 crore loss in the preceding quarter. The narrowing of the loss was owing to a higher base of last quarter, wherein the loss had widened owing to one time provision worth Rs 4,573 crore for adjusted gross revenue (AGR) dues to the government.
Even as the total expenses of BSNL during the quarter fell 15.3% QoQ to Rs 6,108 crore, a significant fall in revenue also weighed on the bottomline. Of the Rs 6,108 crore, employee cost, which includes salaries, wages, allowances, and other benefits, was at Rs 1,940 crore, a fall of 4.6% from the preceding quarter.
Nearly half of BSNL’s revenue goes towards meeting the employee cost. Therefore, a fall in this expense is crucial for the company to be profitable, analysts said.
Weakness in the topline of BSNL largely was due to fall in revenues from the wireless business. The company’s revenue from wireless business fell 3% QoQ to Rs 1,350 crore. The weakness is this business can be attributed to a continuous loss of mobile subscribers by BSNL owing to weak network services and absence of 4G services.
As of May end, BSNL has lost about 12.9 million mobile subscribers in 17 consecutive months, according to data by the Telecom Regulatory Authority of India (Trai). The company’s subscriber base was at 101.4 million as of May end. BSNL’s active subscribers are nearly half of its total subscribers, according to Trai data.
According to estimates based on its active subscribers and revenues from wireless services, BSNL average revenue per user per month was around Rs 85 in April-June, compared to Rs 86 in the preceding quarter. In comparison, Airtel’s Arpu recently touched Rs 200, whereas Jio’s Arpu was at Rs 180.5.
In the Lok Sabha last week, minister of state for communications Devusinh Chauhan said BSNL’s operating profit rose 65% YoY in FY23 to Rs 1,559 crore.
“The loss of BSNL (before exceptional items of Rs 1,499 crore) for the financial year 2022-23 stands at Rs 6,662 crore, which is 4.5% improvement over FY 2021-22. Further, BSNL has been Ebitda positive since financial year 2020-21,” Chauhan said, adding that BSNL is expected to turn-around with net profit in the financial year 2026-27, with the implementation of revival packages.
The government has set the revenue target of the company at Rs 20,008 crore in FY24. For FY25 and FY26, the company has revenue targets of Rs 24,428 crore and Rs 28,476 crore, respectively.
BSNL has currently deployed the 4G network in pilot mode across 200 tower sites in three districts of Punjab – Ferozepur, Pathankot and Amritsar. Last month, the company launched beta 4G services in Amritsar.
In May, BSNL CMD PK Purwar told FE that the company will first provide the services in high-revenue earning circles. The reason for the company to first launch 4G in key circles is to arrest the subscribers’ churn and increase its revenue. Currently, among the 30 circles, some of the high revenue earning circles for BSNL are Kerala, Maharashtra, Tamil Nadu, Karnataka, and Punjab.
Besides, the company is also focusing on growing its home broadband as well as enterprise business. In the April-June quarter, BSNL’s revenue from FTTH (fiber-to-the-home) grew by 5.3% to Rs 565 crore.
In the FTTH segment, the company currently has 3.61 million subscribers as of May end, compared to Jio and Airtel at 8.92 million and 6.41 million, respectively. BSNL lost its top position in the segment to Jio in November 2021, just within two years of commercial launch of JioFiber.