The government on Monday said, State-owned undertakings Bharat Sanchar Nigam Limited (BSNL) and Mahanagar Telephone Nigam Limited (MTNL) have turned EBITDA positive in first six months of the current financial year.

While BSNL’s Earnings before interest, taxes, depreciation, and amortisation (EBITDA) rose from losses of ₹3,596 crore for half-year ended September 2019 to profit of ₹602 crore (positive) in September 2020, for MTNL the figures rose to ₹276 crore (positive) in September 2020, from losses of ₹549 crore in September 2019.

According to Department of Telecommunications (DoT), both organisations are expected to reduce their losses by 50 per cent compared to 2019-20. On 4G services, DoT said the core network for 4G will be totally made in India. BSNL and MTNL are strategic assets, and will provide a big impetus to Indian manufacturers, it said.

Workforce reduction

The reasons for better performance include a sharp reduction in wage bill due to Voluntary Retirement Scheme (VRS), wherein nearly 50 per cent workforce of BSNL and 75 per cent of MTNL was reduced.

BSNL is also rapidly expanding its Fiber-To-The Home (FTTH) connections and the progress is being closely monitored by DoT. In the mobile segment, the market share has increased to 10.36 per cent in October, 2020 according to figures published by TRAI.

BSNL added over 10 million new customers in the mobile segment during this financial year. This has also given fillip to government’s Digital India drive of cashless transactions as online transactions have increased by over 43 per cent in December, 2020 since last financial year, it said.

BSNL and MTNL have also successfully raised money from the bond route. In the recent bond-offer of MTNL, the issue was subscribed more than three times and for BSNL more than two times.

Monetising assets

According to DoT, both MTNL/ BSNL have been able to monetise core and non-core assets totalling ₹1,830 crore in 2019-20. This figure is expected to be in excess of ₹3,000 crore in the current year. In this regard, six properties are expected to be approved for auction through DIPAM route.

BSNL is monetising its tower assets by leasing them out. It earned ₹1,018 crore in the previous year and has planned to securitise the earnings from tower rentals. BSNL towers have unique preposition of fiber connection in more than 70 per cent which make them highly attractive for telecom service provider (TSP).

Fiber has been monetised by leasing it out to private TSPs and BBNL. It has leased out two-lakh kilometres of OFC at the rate of ₹18,000 per kilometre per year, earning a revenue of ₹360 crore.