BSNL loss narrows to Rs 3,803 cr for latest financial year

bsnlBharat Sanchar Nigam Ltd, the state-owned telecom operator, reported a loss of Rs 3,803 cr for the year ended March 2016, taking its total loss to over Rs 47,000 cr.

The silver lining to the bad news is that the loss is lower than those of the last few years.

In the previous year (2014-15) for example, the net loss was an eyewatering Rs 8,234 cr.

However, the latest numbers have pushed the company one step closer to insolvency and bankruptcy.

The last time BSNL was in profit was in 2008-09. Since then, the company has been reporting loss after loss.

As in case of any firm, repeated losses result in the erosion of the company’s value, ultimately reducing it to zero.

While most companies would have folded up already after taking a 47,000 cr loss, BSNL has been able to survive so far because of repeated help from the central government.

The government, for example, is paying BSNL Rs 6,725 cr in lieu of surrendering 4G spectrum in six circles.

It also waived off a loan of Rs 1,411 cr that BSNL was supposed to pay back. It also paid BSNL Rs 169 cr for partially surrendering CDMA spectrum.

The government has also given BSNL a Rs 3567.58 cr contract to provide mobile connectivity in remote and backward districts. Another similar contract, worth Rs 1,975 cr, was also given for providing cellular connectivity in Arunachal Pradesh and two districts of Assam.

Besides these, the government has also given BSNL special contracts to provide connectivity in Andaman & Nicobar Islands and the North East.

These support measures helped the company survive in an otherwise hostile market situation.

BSNL started going into a loss as most ordinary mobile and landline subscribers preferred private companies like Bharti Airtel and Vodafone over the taxpayer-owned BSNL.

Though BSNL’s tariffs are often cheaper than those of Airtel and Idea, many still prefer to go with the latter due to BSNL’s service quality.
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