India's state-owned BSNL reports worst financial figures for 10 years

State run Indian telecoms company Bharat Sanchar Nigam Ltd (BSNL) has released its financial figures showing its first annual loss for 10 years.

The state run telecoms company  posted a loss of $178.177 million (Rs 1,823 crore) in 2009-10, compared to the profit of $124.486 million (Rs 575 crore) it showed in 2008-09, which it put down to a decline in revenue from landline services. It also cited the fact that it had to pay employees more due to the Sixth Pay Commission for government employees.

Kuldeep Goel, BSNL chairman and managing director at BSNL, who resigned today, said: “The wage revision alone caused an additional expenditure of $194.847 million (Rs 2,900) crore. If the wage revision had not been there, the company would have recorded a profit before tax of $152.197 million (Rs 703 crore).”

He said that he hoped the company would fare better in the current financial year. However, we’re not so sure it will. The company has already had to take out a loan to pay $324.746 million (Rs 18,500 crore) for 3G and BWA spectrum, which it is currently trying to get back from the government. However, if this does not happen the company will have to pay an interest of $108.249 million (Rs 1,500 crore) during the year.

Despite its loss the company’s market share in terms of revenue stands at 19.5 percent putting it in second place after Bharti Airtel. It also registered a strong growth of 47 per cent in the broadband segment in 2009-10 – broadband revenue went up to $105.001 million (Rs 2,485 crore) in 2009-10 from $36.5445 million (Rs 1,690 crore) in 2008-09.