BSNL FY19 net loss swells to Rs 14904.24 cr

State-owned telecom operator BSNL‘s net loss has zoomed to Rs 14904.24 crore for the fiscal ended 31st March 2019 compared to Rs 7992.85 crore in the previous fiscal.

The telco’s loss before interest lease depreciation and tax has widened to Rs 8709.72 crore from Rs 3353.03 crore. Total operating income shrank to Rs 18946.60 crore from Rs 24570.54 crore.

CARE Ratings has assigned CARE AA+ (CE) rating to BSNL’s long-term and short-term bank facilities worth Rs 23,500 crore.

The ratings are based on the credit enhancement in the form of ‘Letter of Comfort’ from the Department of Telecom (DoT) under the Ministry of Communication and Information Technology, Government of India (GoI).

The revision in the rating of BSNL is due to a change in the analytical approach adopted by CARE Ratings for rating of debt backed by a ‘Letter of Comfort (LOC)’.

As per the revised criteria, the rating of the debt backed by LOC will lie somewhere between the unsupported rating of the issuer and that of the LOC provider.

CARE noted that this revision in ratings is only pursuant to change in analytical approach by CARE Ratings and should not be construed as deterioration in the credit profile of the Department of Telecom (DoT), Government of India (GOI) or the standalone credit profile of Bharat Sanchar Nigam Limited (BSNL).

Further, the rating continues to factors in 100% ownership of Government of India (GoI). The ratings also factor in continuous support in the past & expected support in the upcoming years to BSNL from GoI (as GoI had announced revival plan of MTNL and BSNL on October 23, 2019) and strategic importance of BSNL for GoI for implementing various telecom infra projects throughout the country and its vast asset base, which is instrumental in network building in areas of strategic and national importance.

The standalone rating considers the GoI’s 100% shareholding in the company and the presence of nominee directors appointed by GoI on the board of BSNL. The ratings also factor in the large subscriber base and its reach throughout the country. However, these rating strengths are partially offset by its weak operational and financial performance as reflected in its continuing losses over the past few years.

BSNL was incorporated in September 2000 and is wholly owned by GoI. BSNL took over the business of providing telecom services and network management from the erstwhile Central Government Departments of Telecom Services (DTS) and Telecom Operations (DTO), with effect from October 01, 2000.

BSNL has installed Quality Telecom Network in the country & now focusing on improving it, expanding the network, introducing new telecom services with ICT applications in villages.

BSNL serves its customers with a wide bouquet of comprehensive range of telecom services including fixed-line, GSM mobile, national long distance (NLD), international long distance (ILD), Wireless in Local Loop (WLL), narrowband and Broadband Internet services, virtual private network (VPN), ISDN, leased line, intelligent network, and electronic private automatic branch exchange (EPABX) services, etc in PAN India (except New Delhi and Mumbai) including inaccessible areas of Siachen glacier and North-Eastern regions of the country.

According to TRAI, as of 30th September 2019, BSNL is the largest wireline operator in the country with 10.1 million wireline subscribers (47.13% market share). It also holds the 9.97% market share (116.9 million subscribers) in the wireless segment as of 30th September 2019.