BSNL-MTNL losses to rise 50% in 2011-12

State-owned mobile operators MTNL and BSNL are estimated to have increased their losses by 50% to more Rs 13,000 crore last year, according to numbers from DoT.

The bigger company, Bharat Sanchar Nigam Ltd or BSNL had a loss of about Rs 6,300 crore in 2010-11 and is likely to see it zoom to about Rs 9,700 crore last year. During the first nine months alone, the loss was Rs 7,150 crore.

MTNL, which is also listed on the stock markets, will see its losses mount to about Rs 3,600 crore for last year, from Rs 2,800 crore a year ago, at a slower pace than BSNL.

The losses are increasing despite control over costs.

MTNL, for example, cut its employees salary from Rs 5000 crore in 2009-10 to about Rs 3300 crore last year. But MTNL has been hit hard by rising interest expenses, which went from almost zero three years ago to about 900 crore last year.

The primary reason for the woes of the companies is a drastic fall in subscriber revenues.

In case of BSNL, total revenue fell from about Rs 36,000 crore in 2008-09 to an annualized Rs 28,000 crore last year. (See chart below, showing income and expenditure of BSNL for the last four years.)

For MTNL, it was even more drastic. From an income of Rs 5,250 crore in 2008-09, subscriber revenues fell to an estimated Rs 3,600 crore last year (see chart above.)

BSNL’s market share in mobile has fallen from 19% in March 2009 to 12.75% in March 2012.

ALSO READ: CVC finds a scam in FWT purchase in BSNL