EBITDA
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.
- EBITDA=Net Income+Interest+Taxes+D+A
- where: D=Depreciation A=Amortization​
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