BSNL posts $1 billion loss but things could be worse

BSNL posted a net loss of close to US$1 billion for the most recent financial year, but its business is actually looking healthier than that figure suggests, despite the fact that while its rivals are focusing on 5G, it is still to roll out 4G.

The Indian state-owned operator, which has has more than its fair share of troubles in recent years, or even decades, as the market’s private players have built at scale, reported a bottom line of 81.17 billion rupees (US$981 million) for the twelve months to the end of March. However, it’s important to note that the figure was hit by some hefty exceptional items, in particular a provision of close to INR177 billion (just over $2 billion) for AGR dues payable to the government.

A closer look at BSNL’s data indicates that things might not be as bad as they seem. The telco posted a 14% increase in annual revenue from operations to INR191.3 billion, which according to the local press is ahead of government expectations. The Financial Express cites an MoU with the Department of Telecommunications (DoT) that shows a INR171.6 billion revenue target for the year.

It is expected to reach INR200 billion in the current financial year, with its revenue target rising by about INR40 billion per year for the next two fiscal years.

BSNL reported revenue growth across most segments, including mobile and fibre-to-the-home (FTTH).

Further, the latest figures from the regulator suggest a certain amount of stability at BSNL. The telco claimed a 9.06% share of India’s mobile customers at the end of March, which at first glance seems like a fairly low figure for a former incumbent. However, it’s worth noting that its share is only a couple of percentage points lower than it was well over a decade ago. BSNL’s mobile customer base shrank in March, but not by a massive amount. Meanwhile, it is adding broadband customers and still claims a quarter of India’s – admittedly much smaller – wireline market.

That’s not a bad mobile performance when you consider how far behind its rivals BSNL is. Much has been made of the fact that Vodafone Idea has yet to share firm 5G rollout plans – and let’s not forget that Vodafone valued its Indian business at zero in its own financial statement earlier this month – but BSNL has yet to offer 4G services.

The lack of 4G has certainly had an impact on BSNL’s turnover, but that could all be about to change.

Last week the Economic Times reported that BSNL is at the point of rolling out 4G after trialling the technology for the past three months. It quoted IT and Communications Minister Ashwini Vaishnaw as saying that BSNL has installed 200 sites that will go live within the next two, and that it will light up an average of 200 sites per day going forward.

Furthermore, 5G is apparently also on the way. BSNL is rolling out a homegrown 4G-5G stack, which means that with “a very small software adjustment” it can upgrade to the fifth generation of mobile technology. Vaishnaw predicts that BSNL will be a 5G player around the November-December timeframe, which sounds promising, but as we know things don’t always go to plan in Indian telecoms.

That said, BSNL is not in as dire a position as it was a few years ago. Perhaps Vodafone Idea should take note.

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