On July 27, the Union Cabinet approved a ₹1.64 lakh crore package to revive the state-owned telecom firm, Bharat Sanchar Nigam Limited. While private players are gearing up to deploy 5G services, the government has allocated ₹44,993 crore for administrative allotment of the 4G spectrum. The revival package also includes funding for financially unviable rural wire line services where BSNL is the only effective player.
The government expects that with the implementation of this recent package, BSNL will turn around and earn a profit by FY27. The firm last made a profit in 2008-09. In the last 13 years, the telecom has suffered losses amounting to ₹1.02 trillion.
To realise the goal of turning BSNL profitable in the next five years, a crucial step would be to expand the falling subscriber base. At present, the subscriber base of Jio and Airtel is three times that of BSNL’s. Not only is the subscriber base falling, but the revenue BSNL makes from each user is also a fraction of what private service providers get. The average revenue earned per user by BSNL is 2.5 times lower than what private players make.
