IT Committee report highlights BSNL, MTNL won't be profitable for another two years
By MYBRANDBOOK
The state-run Bharat Sanchar Nigam Limited (BSNL) has been highly impacted as it has failed to monetize land assets and also constantly delaying 4G network rollout. The parliamentary standing committee on IT has said in a report that the telecom company will turn profitable for another two years even though it is saving up to Rs 10,000 crore annually.
“The expenditure of BSNL has reduced from Rs. 34,400 crore per annum to Rs. 24,687 crore per annum (Annualized value of 9 months figures) mainly due to savings in employee benefits expense, due to VRS [Voluntary Retirement Scheme] as part of revival package,” the Parliamentary Standing Committee on Information Technology said in its report tabled in the Lok Sabha and the Rajya Sabha on 10 March.
As per DoT’s report, BSNL has turned Ebitda positive for the first six months of the current fiscal year.
Although, the parliamentary standing committee has mentioned that BSNL is expected to be “profitable from FY 2023-24” onwards.
But this is subjected to the “realisation of revenue and cash flow” from services as well as from land assets monetization as envisaged in the revival package introduced by the Central government in 2019.
The report also questioned the telecom department as to why 4G spectrum had not been allocated to BSNL or its sister-firm MTNL, to which telecom secretary Anshu Prakash said that the tender initially floated for telecom equip procurement had been cancelled as the telecom department intended to “encourage BSNL as a vehicle for Indian telecom equipment”.
“As on date, there is not a single Indian company which can give them the equipment of 4G which can be used for vast networks. So, what BSNL has done is that, on 1st January, they have floated a fresh tender in which there will be a proof of concept which will be a substitute for experience. Leading companies like TCS, Tech Mahindra, Sterlite, and L&T have purchased documents for the proof of concept. BSNL had nearly 1600 queries after the pre-bid meeting, which will be answered shortly,” the report said while quoting Prakash.
He also added that in the interest of the two telcos spectrum has been allocated for a 20-year period so that they are able to provide 4G services once they have the 4G equipment. He further said that spectrum will now be provided in June-July, in fiscal 2021-22.
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