Wednesday, 16 October 2019

BSNL to borrow US$1.7bn to fund turnaround

By Mary Lennighan, for Total Telecom
Tuesday 24 September 19

Indian state-owned operator has posted declining revenues and widening losses in recent years, but its mobile customer base is growing

BSNL may turn to the market to borrow 120 billion rupees (US$1.7 billion) to finance a major expansion plan designed to turn around its ailing fortunes. The troubled Indian telco will push on with the plan to raise capital once it has secured cabinet approval…

BSNL may turn to the market to borrow 120 billion rupees (US$1.7 billion) to finance a major expansion plan designed to turn around its ailing fortunes.

The troubled Indian telco will push on with the plan to raise capital once it has secured cabinet approval, the Financial Express reported on Tuesday, citing a TV interview with company chairman and managing director P K Purwar.

Purwar told the paper that a plan to revive BSNL is at an advanced stage. He noted that the plan could include the administrative allocation of 4G spectrum and, as previously reported, a voluntary redundancy scheme for as many as 70,000 employees

BSNL's business has been in trouble for some time, but bad press surrounding it has intensified in recent months with frequent reports of employees going unpaid. Sister company MTNL is in a similar boat. Salaries for August were delayed, but the Press Trust of India reported in recent days that staff have now been paid.

According to its most recent annual report, the operator posted revenues of INR250.7 billion for the financial year to March 2018, down considerably from 315.3 billion the year earlier, while its losses widened to INR79.9 billion from INR47.9 billion.

In the year to March 2019 the revenue slide continued to INR193 billion while losses continued to grow, coming in at an estimated INR140 billion, the Financial Express said, citing figures presented to parliament.

In one positive sign, BSNL's mobile subs base has been creeping up in recent months. In fact, it was the only operator other than Reliance Jio to record mobile subscriber growth growth, according to the Telecom Regulatory Authority of India (TRAI), although admittedly its 291,000 net adds pale into insignificance compared with Jio's 8.5 million. Its market share stands at just under 10%.

On the fixed side though, hefty losses have continued. Nonetheless, BSNL still serves almost half of the market.

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