India’s telecom market remains intensely competitive, and BSNL’s struggle reflects the delicate balance between heavy capital expenditure, high employee costs, and the need to expand its subscriber base while improving revenue metrics. Here’s a closer look at what’s unfolding:
A Sudden Reversal of Fortunes
After recording profits for two straight quarters—the first in 18 years—BSNL slipped back into the red with a net loss of ₹1,049 crore in the June quarter. This was in sharp contrast to its March-quarter profit of ₹280 crore and December-quarter profit of ₹262 crore.
Revenue from operations dropped steeply by 24% sequentially to ₹5,029.6 crore. Declines were seen across all core segments: consumer mobility, enterprise, and consumer fixed access.
Cost Pressures and Employee Burden
Interestingly, total expenses declined 9.4% quarter-on-quarter to ₹6,840 crore, suggesting some efficiency gains. However, employee costs surged 39% sequentially to ₹1,940 crore, accounting for 38.6% of BSNL’s revenue—a structural burden that continues to weigh down profitability.
On a year-on-year comparison, BSNL’s performance looked slightly better: losses narrowed from ₹1,542 crore in the same period last year, aided by a 14.5% rise in revenue. This growth came largely from the rollout of 4G services across nearly 100,000 sites, along with lower tariffs boosting uptake.
Still, depreciation and amortization expenses rose 43% on-year to ₹1,940 crore, reflecting the heavy capital investments in spectrum and infrastructure.
Government’s Capex Push and Strategic Focus
The Ministry of Communications has made it clear that the government is playing a long game with BSNL. A massive ₹47,000 crore capex boost has been planned, following the addition of assets worth over ₹26,000 crore in 2024-25.
According to the ministry, while near-term profitability will remain pressured due to high depreciation and amortization costs, the outlook is expected to strengthen with consistent top-line growth and efficiency in operating expenses.
Subscribers and ARPU Challenge
BSNL had 90.46 million mobile subscribers by June-end, a modest decline from 91.06 million in March. However, compared with June 2024, the subscriber base actually grew by nearly 5.5 million, showing positive traction.
The bigger concern remains average revenue per user (ARPU). Minister Jyotiraditya Scindia acknowledged that ARPU is uneven across circles—some as low as ₹40-45 per month, while others hover around ₹175. He has tasked BSNL officials with a bold target: 50% growth in mobile services and 25–30% growth in enterprise services by 2026, while simultaneously boosting ARPU through customer satisfaction, upselling, and cross-selling.
The Road Ahead
BSNL’s immediate financials may look grim, but the government is betting heavily on its revival through sustained investments in spectrum, network rollout, and digital infrastructure.
If BSNL can strengthen its enterprise business, stabilize ARPU, and manage employee-related costs, it could carve out a stronger position in the market despite the dominance of private operators. For now, however, profitability remains elusive, and the telecom giant must focus on converting its recent subscriber growth into sustainable revenue gains.
Feel free to share your experiences and insights in the comments below. Let’s continue the conversation and grow together as a community of traders and analysts.
By sharing this experience and insights, I hope to contribute to the collective knowledge of our professional community, encouraging a culture of strategic thinking and informed decision-making.
As always, thorough research and risk management are crucial. The dynamic nature of financial markets demands vigilance, agility, and a deep understanding of the tools at your disposal. Here’s to profitable trading and navigating the election season with confidence!
Ready to stay ahead of market trends and make informed investment decisions? Follow our page for more insights and updates on the latest in the financial world!
For a free online stock market training by Yogeshwar Vashishtha (M.Tech IIT) this Saturday from 11 am – 1 pm, please sign up with https://pathfinderstrainings.in/training/freetrainings.aspx
Experience profits with my winning algo strategies – get a free one-month trial with ₹15 lakh capital! – https://terminal.algofinders.com/algo-terminal
Disclaimer
This article should not be interpreted as investment advice. For any investment decisions, consult a reputable financial advisor. The author and publisher are not responsible for any losses incurred by investors or traders based on the information provided.