BSNL's service revenue seen at Rs 17,000 cr in FY22; says confident of defending turf with quality 4G services

Bharat Sanchar Nigam expects over Rs 17,000 crore revenue from services in FY22, a tad lower than the previous fiscal, mainly due to the removal of call connect charges that used to bring in additional inflows, according to its Chairman and Managing Director PK Purwar.

Purwar asserted that the state-owned telecom corporation is confident of retaining its customer base and defending its turf with quality 4G services to be launched in the coming months, even as competition intensifies with private telcos gearing up for 5G services.

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The start of 5G offerings by private operators will not place BSNL at an immediate disadvantage, as the device ecosystem for the new-age services is still evolving, he said, adding that preparation for BSNL's 4G services launch is well on track.

Bharat Sanchar Nigam Ltd (BSNL) is targeting a 4G rollout in 2022.

"Despite the challenges, we have been able to maintain stable revenue (from services, excluding other income) in FY22. Against Rs 17,452 crore income from services in FY21, this year we will close at over Rs 17,000 crore of revenue," Purwar told PTI.

The decline is because of the removal of interconnect usage charges, he added. The call connect charges, which have been scrapped, was bringing in an additional revenue stream of about Rs 600-800 crore for the telecom corporation, and its discontinuation has dried up those inflows.

BSNL's losses stood at Rs 15,500 crore in 2019-20 and had halved to Rs 7,441 crore in 2020-21.

"For this fiscal, we expect losses to be at similar levels as last year," the BSNL Chief said.

While substantial savings were derived on account of VRS (which brought down salary costs) and maintaining a tight check on opex, the removal of call connect rates impacted the overall realisations, as BSNL used to be a net IUC (interconnect usage charges) gainer.

The corporation's focus in the coming fiscal will be a 4G rollout and expansion of Fibre to Home.

"Quality 4G services by BSNL will provide comfort to our customers to remain with us. I believe the 5G handset ecosystem will take its own time to mature," Purwar said.

Asked how BSNL hopes to compete in a market where rivals are rolling up their sleeves for the 5G auction and subsequent launch of next-generation services, Purwar contended that the telecom PSU will do all it takes to protect its commercial interests.

The spectrum auctions will be conducted in 2022 to facilitate the rollout of 5G mobile services in 2022-23 by private telecom providers. The market is gearing up for the rollout of 5G services that will usher in ultra high-speeds and spawn new-age services and business models.

"Even today, when we have 3G, we are still able to sustain ourselves in the market. Also, I do not expect the lag for 5G services to be similar to that of 4G services," Purwar said.

The roadmap on FY23 is clear and there has been "good progress" on proof of concept where nearly all critical tests required for commercial deployment on the core side have been completed successfully.

"There is also substantial progress on the radio access network (RAN) side," he said.

Once the tests are done, BSNL will engage with successful bidders (TCS, Centre for Development of Telematics and Tejas Networks) for commercial discussion, so the procurement process can be taken forward, Purwar explained.

According to Union Budget documents, the government will infuse Rs 44,720 crore into BSNL in the next financial year. The provision is made for capital infusion for the 4G spectrum, technology up-gradation and restructuring in the telecom PSU.

To strengthen the state-owned telecom corporations, the government had approved a revival plan for BSNL and MTNL in 2019.

The revival plan included measures to reduce the staff cost through a Voluntary Retirement Scheme (VRS), administrative allotment of spectrum for providing 4G services with funding

through budgetary allocation, monetisation of non-core and core assets to generate resources to retire debt, meet capex and debt restructuring by raising of sovereign guarantee bonds.
BSNL and MTNL have turned EBIDTA positive (operating profit) in 2020-21 as a result of these measures.