Bharat Sanchar Nigam expects over Rs 17,000 revenue from services in FY22, slightly lower than the previous fiscal, mainly due to the removal of call extension charges which once brought in additional inflows, said BSNL Chairman and Managing Director PK Purwar.
Mr Purwar stressed that the state -owned telco is confident of retaining its customer base and defending its region with quality 4G services in the coming months, despite intensifying competition with private telcos gearing up for 5G services.
The initiation of 5G offerings by private operators will not put BSNL at an immediate disadvantage, as the new-age service device ecosystem is still evolving, adding that preparations for the launch of BSNL’s 4G services are well on track.
Bharat Sanchar Nigam Ltd (BSNL) is targeting a 4G launch in 2022.
“Despite the challenges, we have maintained stable revenue (from services, excluding other revenue) in FY22. Compared to Rs 17,452 crore revenue from services in FY21, we will close over Rs 17,000 crore of revenue this year,” Purwar told PTI.
He added that the decrease was due to the abolition of interconnect usage charges. The call linking charges, which have been canceled, bring an additional revenue stream of about Rs 600-800 crore for the telco. Its cessation has dried up that inflow.
BSNL’s loss amounted to Rs 15,500 crore in 2019-20 and has decreased to Rs 7,441 crore in 2020-21.
“For this fiscal, we expect losses to be at the same level as last year,” the BSNL chief said.
While substantial savings were derived from VRS (which reduced payroll costs) and maintaining tight control over opex, the removal of call connection rates affected the overall realization, as BSNL was once a net IUC enhancer (usage charge between connections).
The corporation’s focus in the next fiscal is the launch of 4G and the expansion of Fiber to Home.
“Quality 4G service by BSNL will entertain our customers to stay with us. I believe the 5G mobile phone ecosystem will take its own time to mature,” Purwar said.
Asked how BSNL hopes to compete in a market where competitors are launching 5G auctions and next -generation services, Purwar stressed that telecom PSUs will do everything necessary to protect its commercial interests.
Spectrum auctions will be conducted in 2022 to facilitate 5G mobile services in 2022-23 by private telecommunications providers. The market is gearing up for the launch of 5G services that will lead to ultra high speeds and give birth to new age services and business models.
“Even today, when we have 3G, we can still keep ourselves in the market. Besides, I don’t expect the lag for 5G services to be similar to 4G services,” Purwar said.
The FY23 roadmap is clear, and there has been “good progress” on proof of concept where almost all of the critical tests required for commercial use in the core division have been successfully completed.
“There has also been great progress in the radio access network (RAN) division,” he said.
Once the test is completed, BSNL will engage with the successful bidders (TCS, Telematics Development Center and Tejas Network) for commercial discussions to bring the procurement process forward, Purwar explained.
According to the Union Budget document, the government will put Rs 44,720 crore into the BSNL next year. The provision was made for capital inflows for 4G spectrum, technological upgrades and restructuring in telecom PSUs.
To strengthen the state -owned telecommunications corporation, the government has approved a turnaround plan for BSNL and MTNL in 2019.
The turnaround plan includes measures to reduce staff costs through the Voluntary Retirement Scheme (VRS), spectrum administration allocation to provide 4G services with funding through budget allocations, monetization of non-core and core assets to generate resources for debt retirement, Capex compliance and restructuring debt by raising sovereign guarantee bonds.
BSNL and MTNL have made positive EBIDTA (operating profit) in 2020-21 due to these measures.