State-owned Bharat Sanchar Nigam Ltd (BSNL), which is likely to exit FY23 with revenues of aboutRs 17,000 crore, has a significantly higher target to achieve in FY24.
The government has set the revenue target of the company atRs 20,008 crore in the next financial year, which is 17% higher. For FY25 and FY26, the company has revenue targets ofRs 24,428 crore andRs 28,476 crore, respectively, as per its MoU with the government.
This has once again led the company’s chairman and managing director to read the riot act to the chief general managers (CGMs) of all circles.
“The financial year 2022-23 is drawing to a close and even while we carry out all year-end activities, I urge you to start preparing on a war footing for the year that lies ahead. FY 2023-24 will be a challenging year as there is a 17% jump in the revenue targets in the MoU (memorandum of understanding) with DoT (Department of Telecommunications),” BSNL CMD P K Purwar said in a letter to the CGMs.
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For FY23, the company has a revenue target ofRs 17,161 crore, a YoY growth of 2%. During the nine months ended December 31, the company’s revenue grew 14% YoY to Rs 12,748 crore and its net losses have increased to Rs 5,457 crore fromRs 5,424 crore a year back, due to increase in expenses such as employee cost.
At the time of approval of Rs 1.64 trillion revival package, an MoU between DoT and BSNL was signed which required the latter to achieve revenue targets and profitability, as well as ensure accountability in carrying out the operations, sources in the know said.
“All efforts should be made to keep the operating expenses under control such that the Ebitda is maximised. All circles which are in the negative in operational revenue as compared to, last year will enter the ‘non-performing’ zone of performance evaluation,” Purwar said in the letter.
“QoS (Quality of Services) targets are in line with the investments being made in the network and it is in BSNL’s interest that we try to achieve the service standards that our customers expect. There is every reason to take ownership of all targets and feel motivated in view of the performance-based bonus marks accorded by the assessment system,” Purwar added.
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In the nine months ended December, while the company witnessed an overall increase in revenues, in 13 circles its revenue has fallen. Based on the performance, Purwar last month in a letter to CGMs had said, “It may be noted that the signed MoU between DoT and BSNL to implement Cabinet decision (revival package) requires BSNL to ensure accountability by taking action against non-performers. It can be seen that five circles have become borderline negative (with regard to revenue), five circles have become markedly negative and three have slipped into the critically negative territory in the last one year”.
The eight circles in which the company has seen a significant fall in revenues are West Bengal, Chennai, UP East, Sikkim, Andaman and Nicobar, Orissa, Bihar, and Karnataka. The circles where the company has seen some weakness in revenues are Kerala, Jammu and Kashmir, Andhra Pradesh, North East, and Jharkhand.
In 2022, the company lost 7.7 million mobile subscribers, taking its total base to 106.6 million at the end of December, according to data by the Telecom Regulatory Authority of India.
In FY22, BSNL’s revenues declined nearly 4% on year to Rs 16,811 crore. The company’s loss narrowed to Rs 6,982 crore, fromRs 7,441 crore in the preceding financial year.
According to the targets laid down by the government at the time of providing the bailout package, BSNL needs to post a net profit in the financial year 2026-27