BSNL plunges into the red

Losses result from decline in landline services revenue and higher wages.

State-run Bharat Sanchar Nigam Ltd (BSNL) has posted a loss of Rs 1,823 crore in 2009-10 – its first annual loss since inception ten years ago. A decline in revenue from landline services along with a higher payout to employees because of the award of the Sixth Pay Commission for government employees pushed the company into the red. The company had recorded a profit of Rs 575 crore in 2008-09.

“The wage revision alone caused an additional expenditure of Rs 2,900 crore. If the wage revision had not been there, the company would have recorded a profit before tax of Rs 703 crore,” BSNL Chairman & Managing Director Kuldeep Goel said.

BSNL reported a 10.4 per cent decline in revenues at Rs 32,045.41 crore for 2009-10 as against Rs 35,812 crore in 2008-09.

Goel, who retired today after a tenure of three years, exuded hope that the company would be profitable in the current financial year. However, the payment of Rs 18,500 crore for 3G (third generation) and BWA (broadband wireless access) spectrum would result in interest payment of Rs 1,500 crore during the year. On the company's market share, Goel said that in revenue terms, it stood at 19.5 per cent, second after Bharti Airtel. 

BSNL, however, registered strong growth of 47 per cent in the broadband segment in 2009-10 – broadband revenue went up to Rs 2,485 crore in 2009-10 from Rs 1,690 crore in 2008-09.

The company plans to add 20 million mobile subscribers in this financial year. Besides, it also plans to introduce value-added services for its mobile subscribers. BSNL has restructured into four business units – Consumer Fixed Access, Consumer Mobility, Enterprise and New Businesses. A team of sales executives in each business verticals has been created for the first time and about 10,000 people have been redeployed and trained for sales activities.