The employees of loss-making state-owned BSNL are demanding a salary revision even though the company is far from achieving any of the milestones laid down as part of the Rs 1.64 trillion revival package recently approved by the government.
BSNL currently spends about 40% of its revenue on employee benefits and the company is in no position to bear an increase in its wage bill, according to analysts. The wage bill of private telcos is around 5% of their revenues.
As of FY22, the company’s employee cost, which includes salaries, wages, allowances, and other benefits, was at `7,169 crore, down by over 54% from Rs 15,715 crore in FY17, mainly due to a voluntary retirement scheme offered by the company after October 2019, when the government first came out with a Rs 70,000-crore revival package for it.
BSNL’s total expenses, for the last two financial years is constant at around Rs 26,000 crore. On the other hand, revenues have declined nearly 4% on year to Rs 16,809 crore in FY22.
Over the last six years, BSNL’s revenue from operations fell by over 40%, which has also increased the losses for the entity. However, in FY22, the company’s loss was at Rs 6,982 crore, compared to Rs 7,441 crore in the preceding financial year. In the last three years, the company has been able to narrow its losses.
“The company has been losing a major revenue chunk owing to absence of 4G services, that needs to be first looked at among other things,” a Mumbai-based analyst said.
A weak topline over the years has been making the path to profitability difficult for BSNL. One of the reasons for the company’s fall in revenues is the continuous loss of subscribers. In a span of two years, the state-owned telecom operator has lost about 10 million wireless subscribers, according to a data by the Telecom Regulatory Authority of India. As of July end, the company’s wireless subscribers base stood at 110.6 million.
With a second revival package for the company, the government has set its target to make BSNL compete with the private telecom operators and issues such as employee pay-scales is on the government’s priority list.