In its annual report for fiscal year 2022-23, Bharat Sanchar Nigam Limited (BSNL) has said that the tariffs for telecom services are declining and revenues are dropping in spite of the provision of a large number of new connections. The state-run operator stated that it is trying to increase the average revenue per user (ARPU) by providing innovative value-added services to its customers both on wireline and wireless networks. In order to increase its revenue, BSNL has taken several new initiatives such as infrastructure sharing, commercial utilisation of fixed assets, exploring international business, enterprise business and fixed mobile convergence.
Further, BSNL said that the operational environment continues to remain challenging. During the year 2022-23, the company incurred a loss of Rs 81.61 billion as compared to Rs 69.81 billion during 2021-22. It reported an 8.64 per cent increase in its total revenue. Net loss increased by 16.9 per cent, while cash loss increased to Rs 25.02 billion as compared to the previous year’s loss of Rs 16.73 billion. Borrowings and finance costs also increased. According to BSNL, very fast technological obsolescence and rapid introduction of new technology platforms by competitors make the sector vulnerable to high capital cost exposure dynamic changes in competition level especially in services such as data, value added services, contents etc. compel BSNL to offer matching tariff in broadband and fibre-to-the-home (FTTH) services (ignoring the cost factor and margin) to remain competitive, relevance in the market/service and to maintain an existing customer base. There is a scenario of getting mobile communication cheaper affecting fixed access communication business.
BSNL added that licensor/regulatory authorities change their requirement for compliance for which BSNL has to do some modifications/upgrades in its network. Such modifications/upgrades are not possible most of the time due to technological limitations. However, the operator said that it is making efforts to upgrade the network in coordination with existing vendors/original equipment manufacturers (OEM) or doing new procurement. As per BSNL, the extreme climate changes result in huge losses not only due to loss of services but also due to damages to the telecom equipment.
Despite the present challenges, BSNL said that it has reported an increase in revenues in mobile, FTTH and enterprise business and maintained infrastructure sharing revenue and revenues in landline. During 2022-23, BSNL’s income from services increased to Rs 191.27 billion from Rs 168.09 billion during the previous year, while other income stood at Rs 15.71 billion. Earnings before interest, taxes, depreciation, and amortisation (EBITDA) stood positive during the reported period at Rs 15.58 billion.
