State-owned BSNL has managed to reduce its losses by more than 50% at Rs 7,441 crore in FY21 after its wage bill came down by around 51% at Rs 6,679 crore. This was due to a voluntary retirement scheme undertaken by the company following a revival package offered by the government in October 2019.
BSNL had posted a massive loss of Rs 15,499 crore in FY20. The narrowing of the losses was despite the company’s total revenues declining by 2% at Rs 18,595 crore in FY21. The decline in wage bill brought down the company’s total expenditure during the year by 24% at Rs 26,036 crore.
As a result BSNL became Ebitda-positive after more than three years. The company reported a positive Ebitda of Rs 1,177 crore in FY21 against negative Ebitda or loss of Rs 6,879 crore a year back.
During the year, income from services significantly increased in fibre-to-home (FTTH) and enterprise segment, while revenues from wireline telephony continued to remain under stress. Revenues from mobile services declined marginally due to the impact of the pandemic, absence of 4G services and stiff competition from private players.
The company’s FTTH revenues increased at Rs 937 crore in FY21 compared to Rs 517 crore a year back, while mobile revenues were down at Rs 7,716 crore from Rs 8,067 crore in the previous fiscal.
The government in October 2019 had cleared a Rs 70,000-crore revival package for BSNL and MTNL. The biggest chunk of the revival package, Rs 29,937 crore, was towards the VRS for employees above 50 years of age. The amount included Rs 17,169 crore ex-gratia amount and Rs 12,768 crore towards pension, gratuity, and commutation. Of the 1 lakh eligible employees for VRS, 78,560 had opted for the scheme.
The government believed that by reducing the huge workforce of the firms, 1.65 lakh employees of BSNL, which used to eat up 77% of its revenues in payment of salaries, the companies can become competitive and profitable over a period of time.
Apart from the VRS, the government has to provide Rs 23,814 crore towards administrative allocation of 4G spectrum to these firms. Also, a sovereign guarantee of Rs 15,000 crore has been given to the firms.
The government also said the two PSUs would monetise their assets like land, etc, worth Rs 38,000 crore over a period of four years.
In order to launch 4G services, BSNL has already started preparations to conduct trials with selected consortiums of companies at several locations and after four months, the successful ones will be given an opportunity to bid for rolling out 4G network of the company.
Get live Stock Prices from BSE, NSE, US Market and latest NAV, portfolio of Mutual Funds, Check out latest IPO News, Best Performing IPOs, calculate your tax by Income Tax Calculator, know market’s Top Gainers, Top Losers & Best Equity Funds. Like us on Facebook and follow us on Twitter.
Financial Express is now on Telegram. Click here to join our channel and stay updated with the latest Biz news and updates.