Crunch time for BSNL? FY19 loss may have hit 12,000 cr
Sources said the acute financial crunch was visible in February and the situation only got aggravated then.
NEW DELHI: The state-owned BSNL's 2018-19 losses may have touched Rs 12,000 crore if attributed exclusively to its services, official sources said.
The PSU has another board meeting on April 16, where it may discuss the trends in its annual results among other investment plans.
The April 4 board meeting discussed some HR issues, the sources said, adding that the loss may be reduced marginally if the incomes from government projects are included.
They said the acute financial crunch was visible in February and the situation only got aggravated then. The numbers on losses are up by at least 50 per cent.
BSNL, which has been running up losses for the past 13 years, does not give its loss figures. The only time the figures were released is when the minister gave his reply to questions in Parliament.
Till then, the assessment of its losses or operations are not in public domain and financial and telecom experts do not get credible information from the management to analyse the situation.
The PSU said it's a non-listed entity, so making the numbers public is not mandatory.
As such the statement made by the BSNL management on operations, finances and numbers are not taken up for analysis as they lack validation. The other time its figures come is when the annual survey of sick and incipient companies is released by the Department of Public Enterprises (DPE), said a telecom expert with an analyst firm.
BSNL's annual loss widened to Rs 7,992 crore for 2017-18, Telecom Minister Manoj Sinha had told Parliament last December. Its loss stood at Rs 4,786 crore in 2016-17.
"BSNL's salary issue in February left a lot of questions in the minds of the analysts about its actual financial positions and also the state of the industry," the analyst said.
In the wake of the February salary issue, Kotak Equities said BSNL's total loss may have crossed Rs 90,000 crore.
According to the report, 2007-08 was the last year of positive operating profit (EBIT) for BSNL and since then, the company has posted a cumulative EBIT loss of Rs 82,000 crore from FY09 to FY18.
"This figure would have crossed Rs 90,000 crore by December 2018-end, in our view. Employee expenses, including retirement benefit accruals, stood at 66 per cent of operating revenues in FY18 versus 21 per cent in FY06 and 27 per cent in FY08," the report stated.
It added that FY18 operating revenues (at Rs 22,700 crore) stood 37 per cent below the peak FY06 levels reflecting industry-wide challenges as well as loss of market share for BSNL.
"We believe the current annual cash loss run-rate for BSNL would be in excess of $1 billion (Rs 7,100 crore). These challenges have also meant that BSNL remains far behind the three private operators (Bharti, Vodafone-Idea and R-Jio) on network coverage, capacity and quality," the broking firm said.
"R-Jio's imminent FTTH foray will likely impact BSNL's wireline business soon; this business has been the only growing segment for BSNL the past few y ears," it added.
It has a debt of Rs 15,000 crore.
The PSU has another board meeting on April 16, where it may discuss the trends in its annual results among other investment plans.
The April 4 board meeting discussed some HR issues, the sources said, adding that the loss may be reduced marginally if the incomes from government projects are included.
They said the acute financial crunch was visible in February and the situation only got aggravated then. The numbers on losses are up by at least 50 per cent.
BSNL, which has been running up losses for the past 13 years, does not give its loss figures. The only time the figures were released is when the minister gave his reply to questions in Parliament.
Till then, the assessment of its losses or operations are not in public domain and financial and telecom experts do not get credible information from the management to analyse the situation.
The PSU said it's a non-listed entity, so making the numbers public is not mandatory.
As such the statement made by the BSNL management on operations, finances and numbers are not taken up for analysis as they lack validation. The other time its figures come is when the annual survey of sick and incipient companies is released by the Department of Public Enterprises (DPE), said a telecom expert with an analyst firm.
BSNL's annual loss widened to Rs 7,992 crore for 2017-18, Telecom Minister Manoj Sinha had told Parliament last December. Its loss stood at Rs 4,786 crore in 2016-17.
"BSNL's salary issue in February left a lot of questions in the minds of the analysts about its actual financial positions and also the state of the industry," the analyst said.
In the wake of the February salary issue, Kotak Equities said BSNL's total loss may have crossed Rs 90,000 crore.
According to the report, 2007-08 was the last year of positive operating profit (EBIT) for BSNL and since then, the company has posted a cumulative EBIT loss of Rs 82,000 crore from FY09 to FY18.
"This figure would have crossed Rs 90,000 crore by December 2018-end, in our view. Employee expenses, including retirement benefit accruals, stood at 66 per cent of operating revenues in FY18 versus 21 per cent in FY06 and 27 per cent in FY08," the report stated.
It added that FY18 operating revenues (at Rs 22,700 crore) stood 37 per cent below the peak FY06 levels reflecting industry-wide challenges as well as loss of market share for BSNL.
"We believe the current annual cash loss run-rate for BSNL would be in excess of $1 billion (Rs 7,100 crore). These challenges have also meant that BSNL remains far behind the three private operators (Bharti, Vodafone-Idea and R-Jio) on network coverage, capacity and quality," the broking firm said.
"R-Jio's imminent FTTH foray will likely impact BSNL's wireline business soon; this business has been the only growing segment for BSNL the past few y ears," it added.
It has a debt of Rs 15,000 crore.
