On behalf of the Board of Directors and Management, I welcome you all to this 20th Annual General Meeting of your Company. The outbreak of COVID-19 pandemic with associated lockdown across the Countries since last quarter of fiscal 2019-2020 have triggered a unique crisis for the society and economy. Telecom being ‘essential service’, your Company’s executives and employees have been working even during lockdown, to ensure uninterrupted connectivity to its millions of subscribers of all its services across the Country.
The year 2019-2020 shall be memorable for your Company, considering its strategic importance for the nation, the Union Cabinet on 23.10.2019 approved the revival measures for the Company. The implementation of revival measures is being taken up vigorously. The Voluntary Retirement Scheme (VRS) has been opted by over 78000 employees, for which the cost of ex-gratia payment was borne solely by the Government of India through budgetary support. The action for monetisation of assets is in progress. The Company has already offered land parcels for monetisation through DIPAM. BSNL’s network comprises primarily of 2G and 3G network elements. The Company’s proposed acquisition of 4G equipment is still under process.
The Company’s issue of 85000 Government of India Guaranteed, Rated, Unsecured, Redeemable, Taxable, Listed, Non-Convertible Debentures (NCDs) of face value Rs.10,00,000 each aggregating to Rs. 8,500 Crores on private placement basis for cash at par has been subscribed more than 2 times by the Investors. The issue of these Bonds is for a period of 10 years with a coupon rate at 6.79% per annum, payable on half-yearly basis. The Bonds are listed with Bombay Stock Exchange (BSE). The VRS led to reduction in about 53% legacy manpower which have helped the Company to significantly cut down the employee cost. Similarly, the funds raised through issue of Bonds have helped the Company in refinancing part of its existing debts. To cope up with the issues in the post VRS scenario, M/s Deloitte were appointed as Consultants who have recommended appropriate measures with regard to manpower planning, activities to be outsourced, standardization of processes and centralisation/decentralisation of activities, etc. Accordingly, the action for implementation of the recommendations is being taken, so far, action for merger of Non-Territorial Circles, creation of Business Areas and automation of processes have already been finalised.
The Company’s primary focus has been rapid implementation of revival measures approved by the Union Cabinet. The successful implementation of the revival measures will certainly help your Company’s faster turnaround.
During the year 2019-2020, the Company incurred a loss of Rs. 15499.53 Crores (Previous year Rs.14938 Crores). While the Income from Services is Rs. 17886.09 Crores (Previous year Rs.17761 Crores), the Other Income is Rs1020.47 Crores (Previous Year Rs.1560 Crores).
Employee cost of the Company is nearly 80% of income from services as compared to other telcos, where the same is 3% to 5% of revenue. The Company has substantial accumulated liabilities leading to financial crunch and delayed payment to the vendors which has adversely impacted the quality of service.
The Board of Directors of your Company have decided to commercially operationalize the wholly owned subsidiary Company, which will carry out certain identified non-telecom activities. This will help the Company focus on its core business area and the wholly owned subsidiary will become commercially operational.
I would like to express my sincere gratitude for continued support and guidance received from the Government of India, Ministry of Communications, Department of Telecommunications and other Ministries and Departments of the Government of India, Regulatory Authorities, Local Bodies and the State Governments. The unwavering support of the Ministry of Communications and other Ministries of the Government of India has been the greatest strength of your Company.
The approval of revival measures by the Union Cabinet has undoubtedly been a historic moment in the journey of your Company. On behalf of the Board of Director and the Management, I assure all the stakeholders, that no stone will be left unturned to achieve the goal of Company’s revival and turning it into a viable venture.
I would also like to place on record our sincere thanks and gratitude to all our shareholders, investors, lenders and all other stakeholders who have supported the company including our esteemed customers, associates, suppliers, franchises and service providers for their continued support.
As I conclude, I would like to place on record my appreciation and sincere thanks to the ‘Team BSNL’, for their immense contribution in our forward march.
CHAIRMAN AND MANAGING DIRECTOR