Indian telecom operator Bharat Sanchar Nigam (BSNL) is yet to release its salary for the month of February to its employees, Hindu Buisness Line reported quoting an industry report.
DoT in February removed Sujata T Ray from the charge of director (Finance). Vivek Banzal, who is already holding the charges of director CFA) and director (CM), will be the new director of finance of BSNL.
The department of Telecommunications (DoT) has issued the presidential sanction for availing bank loan for Capex of BSNL on March 1, 2019. “For both year 2017-18 and 2018-19, approval given for Rs 4,300 crore each but the loan taken was much higher than the sanctioned amount.”
The BSNL board sanction and approval sought from DoT was for higher amount. BSNL will be writing to DoT for the sanction of the remaining amount. Similarly BSNL Board proposal for loan for Opex is not approved by DoT so far, the Sanchar Nigam Executives Association (SNEA) website said.
Financial issues at BSNL
From FY 2009 to FY 2018, BSNL has posted a cumulative EBIT loss of Rs 82,000 crore. BSNL’s total EBIT loss would have crossed Rs 90,000 crore as of December 2018, a telecom industry report from Kotak Institutional Equities said.
BSNL’s employee expenses, including retiral benefit accruals, were 66 percent of operating revenues in FY 2018 versus 21 percent in FY 2006 and 27 percent in FY 2008. The PSU’s operating revenues stood at Rs 22,700 crore in FY 2018, 37 percent below the peak FY 2006 levels, reflecting industry-wide challenges as well as loss of market share.
BSNL moved from a peak net cash position of Rs 37,200 crore in FY 2008 to a net debt position of Rs 8,600 crore in FY 2018.
“We believe the current annual cash loss run-rate for BSNL would be in excess of $1 billion. These challenges have also meant that BSNL remains far behind the three private operators such as Bharti Airtel, Vodafone Idea and Reliance Jio Infocomm on network coverage, capacity and quality,” the Kotak report added.
India government, the owner of BSNL, will need to either (a) answer consistent, large, equity calls to keep BSNL afloat, as preferential low or no-cost spectrum allocation alone will not solve the problem, or (b) shut BSNL down. This too will involve material one-time costs.
