India's BSNL and MTNL turn profitable

BSNL and MTNL have reported their first profits in years after slashing thousands of jobs in recent months.

BSNL recorded earnings of about 6 billion Indian rupees ($82.3 million) for the six months to September, after registering a loss of INR35.9 billion ($49 million) in the year-earlier period. MTNL managed INR2.76 billion ($37.7 million) after a loss of INR5.49 billion ($75 million) for the same part of 2019.

The improvement follows the launch of a Voluntary Retirement Scheme (VRS) by the service providers, aimed at reducing the wage bill.

Nearly 50% of employees of BSNL and 75% of MTNL's workforce took advantage of the VRS after it was announced in October 2019.

The operators also benefited from an injection of government funds worth INR201.4 billionn ($2.75 billion) to help them buy 4G spectrum.

BSNL added more than 10 million new mobile customers in the last fiscal year and there is some evidence it managed to lure rural subscribers from Vodafone Idea.

Social distancing norms are likely to have made consumers more heavily reliant on communications networks last year.

With its reputation for a robust network in rural areas, BSNL is likely to have benefited as people moved from cities back to the countryside when India's lockdown was first announced.

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The two state-owned telcos have boosted their operating performance by monetizing assets worth around INR30 billion ($410 million).

With more than 70% of its towers now fiberized, BSNL made about INR10.2 billion ($139 million) from tower assets last year.

"Fiber has been monetized by leasing it out to private TSPs and BBNL [Bharat Broadband Network Limited]," said a press release issued by the operator.

BSNL recently issued a tender for setting up a 4G network. It will need to start offering 4G services to maintain the momentum it has been able to generate in recent months.

— Gagandeep Kaur, contributing editor, special to Light Reading

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