With BSNL posting a net loss of Rs 8,850 crore in FY12 and MTNL Rs 4,018 crore, the future of the two telecom PSUs has been looking very iffy for several years, more so since around 50% of BSNL’s subscribers are inactive and the figure is even higher for MTNL at 60%. While BSNL has indicated its FY13 revenues will be 9% less than in FY12, MTNL’s first half losses of R2,151 crore are 26% higher than they were in the same period last year. In this context, it is good that, in a review meeting with the telecom minister, both PSUs have said that they would continue to bleed in the short term—so far, in most reviews, all that the PSUs have done is to make long-term projections. The fact that various committees have suggested turnaround plans has also allowed the government to continue to fund them, never mind the plans have never been implemented due to union and other troubles.
With the turnaround now firmly out of the window, the focus has shifted to finding ways to reduce expenditure or to keep it under tight control, and try to earn revenues from non-core areas like renting and leasing of real estate space, towers, and leasing of the CDMA network. In short, this means that the future for MTNL and BSNL is to minimise their losses by non-traditional revenues even as the core bleeds. The immediate hope is the refund the PSUs will get by surrendering their broadband wireless access spectrum—around R6,724 crore for BSNL and R4,600 crore in the case of MTNL. In addition, MTNL hopes to get R10,000 crore through sales of land assets—it has around 230,000 sq m of commercial land and 380,000 sq m of residential land. While that’s a tidy sum, given the history of government in selling land—it took over a decade to even demerge the land holding of VSNL—this may be easier said than done. In which case, at some point the government needs to take a call on why the PSUs are being kept afloat and the costs it is incurring for this. Selling the PSUs to strategic investors is an idea worth looking at, more so given their valuable spectrum holdings.