Bharat Sanchar Nigam Ltd. is back where it has been for the majority of the last 20 years—in the red—more than six years after the government invested ₹69,000 crore for its resurrection and almost two years after it paid Boston Consulting Group ₹132 crore for a strategic transformation roadmap.
The state-owned telecom corporation reported a ₹1,302 crore deficit in the most recent quarter, which ran from October to December 2025. The cumulative losses for the nine months that ended in December 2025 were ₹3,709 crore, which was a significant increase over the ₹2,521 crore loss for the same period the previous year.
Additionally, a performance evaluation revealed significant losses in regional circles, prompting BSNL to undergo what it refers to as the hundredth “financial reset” since 2009.
There was a glimmer of hope a year ago. Congratulations erupted as BSNL reported its first operating profit in 18 years, ₹264 crore, for the October–December 2024 period. A closer examination showed that the profit was primarily an accounting artifact because BSNL had drastically reduced reported expenses by shifting some personnel costs and changing its depreciation technique. The tailwinds persisted until the next quarter before waning.
After a year, BSNL has returned with losses. An employee bill that still accounts for about 38% of revenues, increased depreciation and amortization, and bloated network operating costs all continue to negatively impact the company’s bottom line. The cynical take is that the company managed two quarters of accounting-assisted profit, but now it is scurrying as reality reasserts itself, and it needs something to show for the ₹3.28 trillion in cumulative bailouts pledged across three revival packages.
The cousin in the sky
It is hard to avoid drawing comparisons to Air India, the country’s former white elephant, which squandered public funds for decades until the Tata Group bought it out of the government in 2022. It underwent numerous reorganization plans, consultant roadmaps, and government promises, just like BSNL. Similar to BSNL, its politically shielded personnel continued to be much larger than the money it brought in. Because no administration wanted to be seen overseeing the privatization of a national carrier, the Tata takeover was postponed for years.
One of the most underappreciated principles of privatization is likewise demonstrated by the Air India story: the stronger an asset is at the time of sale, the greater the price it commands, and the more likely it is to succeed under new ownership. In the end, the government got about ₹18,000 crore for Air India, which is a small portion of what a financially stable, well-managed airline could have raised.
The opposite has also occurred in India. Even though VSNL’s monopoly on international telecommunications was due to expire, the company was still profitable when the government sold the Tata Group a majority share in it in 2002. After paying a reasonable amount, the Tatas transformed it into a successful international connectivity company and renamed it Tata Communications.
Trajectory of torture
However, it appears like BSNL is following Air India’s torturous path. At least Air India might contend that its removal would reduce customer choice on important routes and that it held a significant market share.
There is no such defense for BSNL. Because a significant chunk of its user base is 2G/voice-only or in rural areas, its average revenue per user (ARPU) is only ₹90, which is half of even the struggling Vodafone Idea’s ₹186 and far below Airtel’s ₹259. Its wireless market share is a pitiful 8%.
Yes, there is a good reason to maintain a fourth participant in the market. In the middle of 2024, Jio, Airtel, and Vodafone Idea all raised their rates by 20–25%, and they have since hinted at more hikes. For those with low incomes, BSNL’s entry-level prepaid plans, which start far below ₹100 for a month of basic calling, do provide a viable choice.
Following the rises in the private sector last July, BSNL gained around 3 million users in a single month as budget-conscious consumers flocked to its less expensive plans. However, it started losing subscribers once more after a few months. A company cannot survive in the long run if it only attracts clients when its competitors overcharge.
Insights from the privatization process
State-owned telecom monopolies are a thing of the past everywhere. Britain privatised BT in 1984; it is now a global operator across 170 countries. From the 1980s onward, companies like Japan’s NTT, France’s Orange, and Germany’s Deutsche Telekom were either publicly traded or partially privatized, and as a result, they all grew more competitive. Instead of the majority shareholder sending the yearly checks, the government should play the function of spectrum allocation and regulator in the telecom industry.
The assets of BSNL, such as its extensive fiber network, its tower footprint in isolated locations, and its spectrum, are truly valuable. The point is not whether India needs that infrastructure, but rather why the taxpayer must continuously fund a PSU that is losing money in order to keep it up.
