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Continued slipping of Telecom Tariffs cause revenue issues for BSNL

The company reported a loss of Rs 8,161.56 Crores for the fiscal year 2022–2023 due to an increase in operating and administrative costs from Rs 9,499 Cr to Rs 9,834.

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Ayushi Singh
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The company reported a loss of Rs 8,161.56 Crores for the fiscal year 2022–2023 due to an increase in operating and administrative costs from Rs 9,499 Cr to Rs 9,834.

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The managerial climate for the government-run telecom provider Bharat Sanchar Nigam Limited (BSNL) continues to be difficult for the business, according to its annual report for FY23. Despite providing additional connections, BSNL reported a loss in income as a result of falling telecom service pricing.

In its annual report for FY23, BSNL stated: "The tariffs for telecom services are going down day by day. Consequently, revenues are dropping in spite of provision of large number of new connections. BSNL is trying to increase the Average Revenue per User (ARPU) by providing innovative value added services to its customers both on wire line and wireless network. In order to increase its revenue, BSNL has taken several new initiatives like Infrastructure Sharing, Commercial Utilization of Fixed Assets, Exploring International Business, Enterprise Business and Fixed Mobile Convergence."

By providing its consumers with cutting-edge value-added services on both wired and wireless networks, BSNL claimed it is working to increase the Average Revenue per User (ARPU). In contrast, its competitors in the private sector raised their prices in November 2021 in order to enhance ARPU. Bharti Airtel has the highest industry average revenue per user (ARPU), which is Rs 200.

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According to BSNL's financial performance, revenues from enterprise, FTTH, and mobile have increased while those from landline and internet have fallen. The company reported a loss of Rs 8,161.56 Crores for the fiscal year 2022–2023 due to an increase in operating and administrative costs from Rs 9,499 Cr to Rs 9,834. The company's EBITDA turned positive at Rs 1,558.79 Crores notwithstanding these difficulties.

"A 14 percent increase in operations revenue. The operational environment still presents difficulties. The company lost Rs 8161.56 crores in 2022–23 (compared to Rs 6981.62 crores the year before). The income from services is Rs 19127.79 crores (up from Rs 16809.22 crores in the previous year), and the other income is Rs 1571.11 crores (up from Rs 2243.7 crores in the previous year). During this Financial Year, the Company had positive EBITDA of Rs. 1558.79 crores (Previous Year 944 Crores)." BSNL continued.

According to BSNL's annual report:"Very quick technological obsolescence and quick introduction of new technology platforms by competitors makes the sector vulnerable to high capital cost exposure dynamic changes in competition level especially in services like data, VAS, contents, etc. compel BSNL to offer matching tariff in broadband and FTTH services (ignore the cost factor and margin) to remain competitive, relevant in the market / service, and to maintain existing customer base. There is a possibility that making mobile communication more affordable will have an impact on the fixed access communication industry."

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As earlier reported by VnD, Bharat Sanchar Nigam Limited (BSNL) became the first telecom provider to set up a Base Transceiver Station (BTS) in Ladakh’s Siachen Glacier this month. Ashwini Vaishnaw, India’s government telecom minister, has previously declared that BSNL will begin mass-deploying 4G beginning around the forthcoming Diwali festival. By the beginning of 2025, BSNL should offer 4G throughout the entire nation.

BSNL is in charge of ensuring connectivity in every remote location as part of the government’s 4G saturation plan. The Union Cabinet approved a project in 2022 to provide 4G mobile connections to all of the country’s disconnected villages.

According to TCS, it will take between 12 and 18 months to deploy 4G for BSNL at 1 lakh sites. This indicates that BSNL will have 4G at 1 lakh locations in India by the beginning of 2025. TCS recently verified that it will be able to roll out 4G for BSNL in 1 lakh sites in around 12 to 18 months.

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Tejas Networks reported in September that it received a Rs 750 crore advance from Tata Consultancy Services (TCS) for providing 4G/5G equipment to BSNL (Bharat Sanchar Nigam Limited). Tejas will take care of the site maintenance in addition to providing the equipment.

The Union Cabinet in June this year, approved the third revival package for Bharat Sanchar Nigam Limited (BSNL), this complete package, cost the government a total of Rs 89,047 crore, which intended to revive BSNL and establish it as a dependable telecom service provider with a particular interest and emphasis on enhancing connectivity in rural parts of India.

The first revival package, totaling Rs 69,000 crore, was approved in 2019, marking the beginning of the process to revive BSNL and Mahanagar Telephone Nigam Limited (MTNL). This package was crucial in bringing both counterparts’ operations under control.

Following which , the government approved the second rejuvenation package in 2022, totaling Rs. 1.64 lakh crore. This complete package included a number of essential components, including finance for capital expenditures, funds to close the viability gap for rural landlines, debt restructuring, payment of Adjusted Gross Revenue (AGR) dues, and the merging of BBNL and BSNL.

These relief packages drastically reduced BSNL’s overall debt from Rs 32,944 crore to Rs 22,289 crore and helped the company return to operating profitability starting in the fiscal year 2021–2022 (FY 2021–2022).

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