Bharat Sanchar Nigam Limited (BSNL) has been a loss-making company for as long as one can remember, but in the recent past, the telecom operator has reported operating profits. This is a major deal, and what's even better is that BSNL's operating profits have grown for two consecutive years. For the financial year 2021-22, BSNL's operating profit was Rs 944 crore while it grew to Rs 1559 crore in 2022-23.
One of the major reasons why BSNL could post operating profits and continue to grow YoY (Year-on-Year) was the announcement of multiple relief packages from the government. The Voluntary Retirement Scheme (VRS) announced for BSNL employees with the 2019 relief package was a major game changer. Out of the 1.63 lakh employees, over 78,559 opted to retire and this helped BSNL in lowering costs.
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Then came another relief package worth Rs 1.64 lakh crore in 2022. After that in 2023, another relief package worth Rs 89,047 crore was announced. Both the relief packages helped BSNL acquire spectrum as well as restructure its debt. The state-run telecom operator is also monetising its assets such as land parcels and office buildings. The government has asked BSNL to sell off buildings and land parcels to raise funds.
BSNL is also looking to raise funds via two 10-year bonds in the coming months. The bonds will be backed by the government and will have an irrevocable guarantee. That is why, these bonds will carry a AAA (CE) rating by Crisil. BSNL will be looking to raise about $290.3 million. With the funds, the state-run telecom company will roll out 4G and fund network expansion throughout the country.
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BSNL's reporting of operating profits suggests that the company can turn entirely profitable in the near future. The central government expects BSNL to turn profitable by the financial year 2026-27 because of the relief packages announced in recent years.
