Context: BSNL & MTNL turns EBITDA positive with in 1 year of approval of revival plan by Union Cabinet.
Both organizations expect to reduce their losses by 50% when compared to 2019-20
Within a years of revival plan, the State-owned undertakings Bharat Sanchar Nigam Ltd. (BSNL) and Mahanagar Telephone Nigam Ltd. (MTNL) have turned EBITDA positive in first 6 months of this financial year.
The reasons for better performance include a sharp reduction in wage bill due to Voluntary Retirement Scheme (VRS) (nearly 50% workforce of BSNL and 75% of MTNL was reduced).
Equally important, BSNL was able to maintain their revenue and cut down on other costs.
BSNL is also rapidly expanding its Fiber-To-The Home (FTTH) connections and the progress is being closely monitored by DoT.
In the mobile segment, market share has increased to 10.36% in October, 2020 as per figures published by TRAI.
BSNL added over 10 million new customers during this financial year in mobile segment.
About EBITDA:
EBITDA, or earnings before interest, taxes, depreciation, and amortization, is a measure of a company's overall financial performance and is used as an alternative to net income in some circumstances.
EBITDA is essentially net income (or earnings) with interest, taxes, depreciation, and amortization added back.
EBITDA can be used to analyze and compare profitability among companies and industries, as it eliminates the effects of financing and capital expenditures.
EBITDA is often used in valuation ratios and can be compared to enterprise value and revenue.