i

PROJECT REPORT

ON

“BSNL”

“Financial Overview of Telecom Sector in India”

FOR

THE PARTIAL FULFILLMENT OF THE REQUIREMENT OF

THE DEGREE OF BACHELORS OF BUSINESS ADMINISTRATION

(2016-19)

FROM

FACULTY OF COMMERCE ABD BUSINESS MANAGEMENT

AMRAPALI GROUP OF INSTITUTES (HALDWANI)

SUBMITTED TO, SUBMITTED BY,

MR. Amanjeet Sethi Akansha Mehta

(HEAD OF THE DEPARTMENT) B.B.A. 6th SEM.

FCBM, AGI (Haldwani) Roll No. 1661250088

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STUDENT DECLARATION

I, Akansha Mehta, student of BBA 6th semester of Amrapali Group of Institutes hereby
declare that this project report on “Financial Overview of Telecom Sector in India.’’ written
and submitted by me under the guidance of Mr. Amanjeet Sethi is my original work. Entire
analysis and conclusion of this report are based on the information. The empirical finding in
the report are based on the data collected myself while preparing this project. I have not
copied anything from any source or other project submitted for the similar Purpose, if any.

Akansha Mehta
 iii

ACKNOWLEDGEMENT

It is not a single man’s effort which is sufficient for the accomplishment of a research. No
task can be successfully by a single individual. I acknowledge here the names of those
people who have been instrumental in preparation of my project.

I readily acknowledge my indebted to my parents whose support, dedication and honest

efforts have given me an immense help in doing this project.

It gives me immense pleasure to express my deep sense of gratitude and appreciation to my

Project Guide Mr. Amanjeet Sethi, whose constant encouragement and valuable
suggestions gave back bone support in completing this project.

Last but not the least I record my sincere thanks to all beloved and respectable persons who
helped me and could find any separate mention.

Akansha Mehta
 iv

PREFACE

This project report is all about the “financial overview of telecom sector in India”

An attempt has been made to observe the various aspects like Organization’s environment
and Intra and Inter department, job security, feedback process, fairness and supervision etc.

Analysis also includes identification of organizational strengths and weaknesses. These are
the areas that have been rated well and poorly respectively, by the employees in the exit
interview form.

During the collecting the information of employee welfare and it’s functioning, the
disciplinary procedures and how employee’s problems are handled in the organization came
across and made the training a wonderful experience.
 v

EXECUTIVE SUMMARY

The project is an extensive report on how the BSNL Company market its strategies and how
the company has been able in tackling the present tough competition and how it is coping
up by the allegations of the quality of its products. The report begins with the history of the
products and the introduction of the BSNL Company.

This report also contain the basic marketing strategies that are used by the BSNL company
of manufacturing process , technology ,production policy, advertising , collaboration , export
scenario, future prospects and government policies. The report includes some of the key
salient features of market trend issues, In today’s world of cut throat fierce competition , it
is very essential to not only exist but also to excel in the market. Today‘s market is
enormously more complex .Hence forth, to survive in the market, the company not only
need to maximize its profit but also needs to satisfy its customers and should try to build
upon there.
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Table of contents

CHAPTER-1
1.1 INTRODUCTION .................................................. 1
1.2 OBJECTIVE OF STUDY .......................................... 3

CHAPTER-2
2.1 COMPANY PROFILE ............................................. 8

CHAPTER-3
3.1 BSNL ..................................................................13
3.2 FINANCIAL OVERVIEW OF BSNL..........................14

CHAPTER-4
4.1 RESEARCH METHODOLOGY ................................25
4.2 SWOT ANALYSIS ................................................27

CHAPTER-5
5.1 CONCLUSION .....................................................30
5.2 SUGGESTIONS ....................................................31
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5.3 ANNEXURE ........................................................33

5.4 BIBLIOGRAPHY ..................................................36
 0

CHAPTER-1
 1

1.1 INTRODUCTION
Financial analysis refers to an assessment of the viability, stability, and profitability of a business,
sub-business or project. It is also referred to as financial statement analysis or accounting analysis
or of finance Analysis.

It is performed by professionals who prepare reports using ratios that make use of information
taken from financial statements and other reports. These reports are usually presented to top
management as one of their bases in making business decisions. Financial analysis may determine
if a business will:

 Continue or discontinue its main operation or part of its business;

 Make or purchase certain materials in the manufacture of its product;
 Acquire or rent/lease certain machineries and equipment in the production of its goods;
 Issue stocks or negotiate for a bank loan to increase its working capital;
 Make decisions regarding investing or lending capital;
 Make other decisions that allow management to make an informed selection on various
alternatives in the conduct of its business.

Meaning of Financial Analysis

Financial statements are the source of information that present the economic value of a company
to the external users. Several articles and books has defined the Financial analysis as to combine
financial statement, financial notes, with other information, to evaluated the past, current, and
future performance and financial position of company for the purpose of making investment,
credit, and other economics decision. Financial Analysis is concerned with risk factors that might
affect the future performance of a certain company.

Financial analysis is concerned with different aspects of the company, in general financial analysis
deals with profitability (ability to generate profit from delivering good and services), cash- flow
generating ability (ability to generate cash inflows exceed cash outflows), liquidity (the ability to
meet short term obligation), and solvency (the ability to meet long term obligation).

In order to conduct a full, comprehensive analysis, analyst must collect information concerning
economy, industry, competitors, company itself. This external information can be found as
economics statistics, industry reports, and trade publication. The company provides the internal
part of the information which includes the financial statements, and press releases
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Concept of financial analysis

Financial analysis is not only about financial data which is the core of the financial analysis and
provided in the four major financial statements, that provide the historical and current
information; is it about the non-financial data which provide the future information. Regarding the
financial data, can be founded in the four major statements: income statement, balance sheet,
statement of cash flow, statement of changes in owners’ equity.

The income statement shows how much revenue the company generating during certain period
and what its cost incurred. Income statement can be referred as “profit and loss” and it’s prepared
on consolidated basis. Revenues, operating income, net income, and earnings per share can be
driven from the income statement.

The balance sheet or as recently knows as the “statement of financial position”, shows the current
financial position of the company by showing company resource (Assets), and what it owes
(liability) at a specific point in time. While the (owners’ equity) shows the excess of assets over the
liabilities, analysts could use the information stated in the statement of financial position to
answer question regarding improvements concerning liquidity, and solvency, and give the statues
of the company compared to its peers in the same industry.

The cash flow statement classifies the cash flows into of three sections: operating activities which
include items determines net income as well as day to day transactions. While investing activities
includes the acquisition and disposals of long term assets. The last section is financing activities
which contain activities related to obtaining or repaying capital. Cash flow statement provides
information related to performance and financial position. While income statement provides the
necessary information regarding the company ability to generate profit, cash flow statement
provides information regarding the ability of the company to generate cash flow from running the
business itself.

Statement of changes in owners’ equity knows as “statement of shareholders equity”, reports the
changes in the owners’ investments in the business, and it helps analysts in understanding the
changes in the financial position. Beside the four major statements, financial notes and
supplementary schedules, management’s discussion and analysis, and auditor’s reports, provide a
quite good set of extra information for further analysis.

Role of Financial Analysis

The Financial Analysis function performs in-depth analysis of the institution’s financial and
operating results independently of the business units and prepares management reports for
Senior Management and the Board. This function is generally found as a separate unit only in
larger institutions.
 3

Purpose of Financial Analysis

Individual investors or firms that are interested in investing in small businesses use financial
analysis techniques in evaluating target companies' financial information. By examining past and
current financial statements -- balance sheets, income statements and cash flow statements --
potential investors can form opinions about investment value and expectations of future
performance. Financial analysis can also assist small-business owners as they weigh the effect of
certain decisions, such as borrowing, on their own companies.

1.2 OBJECTIVE OF STUDY

 To know the popularity of BSNL among the consumers in India
 To know about the brands of GSM and their market capitalization
 To know about the competitive strength of BSNL
 To know the consumer preferences and expectations with regard to the choice of GSM
sim for various plan of BSNL
 To motivate the dormant retailers for continuing trade with BSNL.

Objective of Financial a Analysis

Different parties are interested in the financial statements for different purposes and look at them
from different angles. For example, the debenture-holders analyze the statements in order to
ascertain the ability of companies to make regular periodical interest payments and final payment
of principal amount on maturity.

The prospective shareholders would like to know whether the business is profitable and is
progressing on sound lines. Above all, the management is interested in the operational efficiency
as well as the financial position of the business.

Hence, the main objective of financial analysis is to make a detailed study about the cause and
effect of the profitability and financial condition of the firm.

The primary objective of financial statement analysis is to understand and diagnose the
information contained in financial statement with a view to judge the profitability and financial
soundness of the firm, and to make forecast about future prospects of the firm. The purpose of
analysis depends upon the person interested in such analysis and his object.
 4

Users of Financial Analysis

1. Owners and investors

Stockholders of corporations need financial information to help them make decisions on what to
do with their investments (shares of stock), i.e. hold, sell, or buy more.

Prospective investors need information to assess the company's potential for success and
profitability. In the same way, small business owners need financial information to determine if
the business is profitable and whether to continue, improve or drop it.

2. Management

In small businesses, management may include the owners. In huge organizations, however,
management is usually made up of hired professionals who are entrusted with the responsibility
of operating the business or a part of the business. They act as agents of the owners.

The managers, whether owners or hired, regularly face economic decisions – How much supplies
will we purchase? Do we have enough cash? How much did we make last year? Did we meet our
targets? All those, and many other questions and business decisions, require analysis of
accounting information.

3. Lenders

Lenders of funds such as banks and other financial institutions are interested in the company’s
ability to pay liabilities upon maturity (solvency).

4. Trade creditors or suppliers

Like lenders, trade creditors or suppliers are interested in the company’s ability to pay obligations
when they become due. They are nonetheless especially interested in the company's liquidity – its
ability to pay short-term obligations.

5. Government

Governing bodies of the state, especially the tax authorities, are interested in an entity's financial
information for taxation and regulatory purposes. Taxes are computed based on the results of
operations and other tax bases. In general, the state would like to know how much the taxpayer
makes to determine the tax due thereon.

6. Employees
 5

Employees are interested in the company’s profitability and stability. They are after the ability of
the company to pay salaries and provide employee benefits. They may also be interested in its
financial position and performance to assess company expansion possibilities and career
development opportunities.

7. Customers

When there is a long-term involvement or contract between the company and its customers, the
customers become interested in the company’s ability to continue its existence and maintain
stability of operations. This need is also heightened in cases where the customers depend upon
the entity.

For example, a distributor (reseller), the customer in this case, is dependent upon the
manufacturing company from which it purchases the items it resells.

8. General Public

Anyone outside the company such as researchers, students, analysts and others are interested in
the financial statements of a company for some valid reasons.

Importance of financial analysis

The financial statement analysis is important for different reasons:

1. Holding Of Share
Shareholders are the owners of the company. Time and again, they may have to take decisions
whether they have to continue with the holdings of the company's share or sell them out. The
financial statement analysis is important as it provides meaningful information to the
shareholders in taking such decisions.

2. Decisions and Plans

The management of the company is responsible for taking decisions and formulating plans and
policies for the future. They, therefore, always need to evaluate its performance and
effectiveness of their action to realize the company's goal in the past. For that purpose, financial
statement analysis is important to the company's management.

3. Extension of Credit
The creditors are the providers of loan capital to the company. Therefore they may have to take
decisions as to whether they have to extend their loans to the company and demand for higher
interest rates. The financial statement analysis provides important information to them for their
 6

purpose.

4. Investment Decision
The prospective investors are those who have surplus capital to invest in some profitable
opportunities. Therefore, they often have to decide whether to invest their capital in the
company's share. The financial statement analysis is important to them because they can obtain
useful information for their investment decision making purpose.
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CHAPTER-2
 8

2.1 COMPANY PROFILE

Bharat Sanchar Nigam Ltd. was incorporated on 15th September 2000 . It took over the business
of providing of telecom services and network management from the erstwhile Central
Government Departments of Telecom Services (DTS) and Telecom Operations (DTO), with effect
from 1st October‘2000 on going concern basis. It is one of the largest & leading public sector units
providing comprehensive range of telecom services in India.

BSNL has installed Quality Telecom Network in the country & now focusing on improving it,
expanding the network, introducing new telecom services with ICT applications in villages &
winning customer's confidence. Today, it has about 36.42 million line basic telephone capacity,
7.13 million WLL capacity, 95.96 million GSM capacity, 34,727 fixed exchanges, 1,17,090 GSM
BTSs, 9,594 CDMA Towers, 102 Satellite Stations, 7,73,976 RKm. of OFC, 4751 RKm. of microwave
network connecting 646 districts, 4519cities/towns & 6.25 lakhs villages .

BSNL is the only service provider, making focused efforts & planned initiatives to bridge the rural-
urban digital divide in ICT sector. In fact there is no telecom operator in the country to beat its
reach with its wide network giving services in every nook & corner of the country & operates
across India except New Delhi & Mumbai. Whether it is inaccessible areas of Siachen glacier or
North-Eastern regions of the country, BSNL serves its customers with a wide bouquet of telecom
services namely Wireline, CDMA mobile, GSM mobile, Internet, Broadband, Carrier service, MPLS-
VPN, VSAT, VoIP, IN Services, FTTH, etc.

BSNL is one of major service provider in its license area. The company offers wide ranging & most
transparent tariff schemes designed to suit every customer. BSNL has 94.36 million cellular & 1.02
million WLL customers as on 31.10.2016. 3G Facility has been given to all 2G connections of BSNL.
In basic services, BSNL is miles ahead of its rivals, with 13.88 million wireline phone subscribers
i.e. 56.96% share of the wireline subscriber base.

BSNL has set up a world class multi-gigabit, multi-protocol convergent IP infrastructure that
provides convergent services like voice, data & video through the same Backbone & Broadband
Access Network. At present there are 21.86 million broadband customers including both wireline
& wireless broadband.

The company has vast experience in planning, installation, network integration & maintenance of
switching & transmission networks & also has a world class ISO 9000 certified Telecom Training
Institute.

During the 2015-16, turnover of BSNL is around Rs. 32,919 Crores.

 9

VISION:

 Be the leading telecom service provider in India with global presence.

 Create a customer focused organization with excellence in customer care, sales and
marketing.
 Leverage technology to provide affordable and innovative telecom. Services/products
across customer segments.

MISSION:

Be the leading telecom service provider in India with global presence.

 Becoming the most trusted, preferred and admired telecom brand

 Providing reliable telecom services that are value for money
 Generating value for all stakeholders – employees, shareholders, vendors & business
associates
 Excellence in customer service -friendly, reliable, time bound, convenient and courteous
service
 Offering differentiated products/services tailored to different service segments
 Developing a marketing and sales culture that is responsive to customer needs
 To explore International markets for Global presence
 Maximizing return on existing assets with sustained focus on profitability
 Changing policies and processes to enable transparent, quick and efficient decision making.

OBJECTIVES:

 To increasing sales revenue with focus on subscriber retention & acquisition by way of
strengthening sales & marketing, quality of service and customer delivery
 Accelerate the pace of expansion of mobile & data services with up-gradation of
technology
 Increasing BSNL visibility in urban, sub-urban and rural areas
 Developing sales and marketing team with attitude towards customer care
 To improve customer care by reducing fault rate, upgrading Customer service Centers
(CSCs) and introducing convergent billing
 Providing a conducive work environment with strong focus on performance to enhance
customer delight towards BSNL services
 Leverage data services to increase BSNL’s customer’s base & revenues by providing higher
bandwidths capabilities for wire line and wireless broadband customers
 To strengthen company’s finances by gainful utilization of its assets through sharing /
monetization of existing infrastructure like land, building and sharing of passive
infrastructure like towers etc.
 Creating Wi-Fi Hot Spots and replacing Legacy wire line exchanges by Next Generation
Network.
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 Expanding the reach of fiber network near to the customer premises particularly in
apartment complexes through FTTH in order to meet the ever increasing bandwidth
requirement for both data & video applications
 To leverage the existing infrastructure of BSNL thereby contributing towards nation
building by facilitating the execution of government programmers and initiatives viz.
National Optical Fiber Network (NOFN), Network for Spectrum (NFS), and dwelling on
Smart City concept
 To improve productivity by training and skill development and redeployment of legacy
manpower
 Developing knowledge pool exposed to latest technological advancements
 To explore opportunities in international telecom in developing markets
 To become preferred service provider to the Government for reliable and secure service
Network and to serve National security interests

Bharat Sanchar Nigam Limited (abbreviated BSNL) is an Indian state-owned telecommunications

company headquartered in New Delhi. It was incorporated on 15 September 2000 and assumed
the business of providing telecom services and network management from the erstwhile Central
Government Departments of Telecom Services (DTS) and Telecom Operations (DTO) as of 1
October 2000 on a going-concern basis. It is the largest provider of fixed telephony and broadband
services with more than 60% market share, and is the fourth largest mobile telephony provider in
India. BSNL is India's oldest communication service provider and its history can be traced back to
the British era. During the British era, the first telegraph line was established between Calcutta
and Diamond Harbour.The British East India Company started using the telegraph in 1851 and till
1854 telegraph lines were laid across the country. In 1854, the telegraph service was opened to
the public and the first telegram was sent from Mumbai to Pune. In 1885,The Indian Telegraph Act
was passed by the British Imperial Legislative Counsel. After the bifurcation of post and Telegraph
department in 1980s, and with the creation of Department of Telecom by 1990s, eventually led to
the emergence of the State owned telegraph and telephone company BSNL. BSNL then continued
the telegraph services in India until it shut down telegraph services completely in July 15, 2013.

Services

BSNL Mobile is a major provider of GSM cellular mobile services under the brand name Cellone.
BSNL provides a complete telecom services solution to enterprise customers including MPLS, P2P
and Internet leased lines. It provides fixed line services and landline using CDMA technology and
its own extensive optical fiber network. BSNL provides Internet access services through dial-up
connections as prepaid, NetOne as Postpaid and Data one as BSNL Broadband.

BSNL offers value-added services such as Free Phone Service (FPH), India Telephone Card (Prepaid
card), Account Card Calling (ACC), Virtual Private Network (VPN), Tele-voting, Premium Rate
Service (PRM) india.html (publisher=Mobiles Bug access date=26 September 2013)BSNL also offers
the IPTV which enables In 2007, BSNL announced plans to provide 5 million broadband
connections and secured 80% of the INR 25 billion rural telephony project of the Government of
India On 20 March 2009, BSNL launched blackberry services across India. BSNL paid Rs.
101.87 billion of spectrum in 2010. As of 2011, BSNL offered coverage in over 800 cities across
India. BSNL launched in 2012 a 3G wireless pocket-sized router called Wink net Mf50. BSNL 3G
provides HSPA+ service with a top speed of 21.1 Mbit/s downlink and 5.76 Mbit/s uplink.
 11

After providing it for 160 years, BSNL discontinued its telegraph service on 15 July 2013. It began
delivering telegrams to the public in February 1855; this service was upgraded to a web-based

Bharat Sanchar Nigam Limited, a Public Sector Enterprise, also provides fiber plans for the home,
which are generally known as BSNL FTTH broadband service. This is the fastest broadband service
provided by BSNL, offering speeds up to 100Mbit/s to home-based Internet

According to a Telecom Regulatory Authority of India Report dated 19 February 2016, at the end
of 2015, BSNL's 14.54% share of the broadband market placed it 4th in market share. As a wireless
provider, it ranked 6th with an 8.

service using the DATAMAIL app in eight Indian languages. On 8 June 2017 BSNL signed a
memorandum of understanding (MoU) with the Universal Service Obligation Fund (USOF) to have
25,000 Wi-Fi hotspots in rural exchanges within the next six months.

In September 2018, The Department of Telecommunication (DoT) approved BSNL's proposal

launch nation-wide 4G LTE services via the allocation of the 2100Mhz band. This meant the state
run company would soon launch pan-India 4G services except for Mumbai and Delhi circles. BSNL
launched 4G services first from Kerala circle in 9-02-2018 at Udumbanchola, Idukki district. Now
BSNL has around 800 live state of art 4G BTS's in corporation with Nokia in Kerala circle. BSNL
started Commercial 4G services at Idukki, Kottayam, Malapuram, Thrissur, Ernakulam districts of
Kerala by shutting down of 3G services.

.
 12

CHAPTER-3
 13

3.1 BSNL
Bharat Sanchar Nigam Limited (abbreviated BSNL) is an Indian state-owned telecommunications
company headquartered in New Delhi. It was incorporated on 15 September 2000 and assumed
the business of providing telecom services and network management from the erstwhile Central
Government Departments of Telecom Services (DTS) and Telecom Operations (DTO) as of 1
October 2000 on a going-concern basis. It is the largest provider of fixed telephony and broadband
services with more than 60% market share, and is the fourth largest mobile telephony provider in
India. BSNL is India's oldest communication service provider and its history can be traced back to
the British era. During the British era, the first telegraph line, was established between Calcutta
and Diamond Harbour.The British East India Company started using the telegraph in 1851 and till
1854 telegraph lines were laid across the country. In 1854, the telegraph service was opened to
the public and the first telegram was sent from Mumbai to Pune. In 1885,The Indian Telegraph Act
was passed by the British Imperial Legislative Counsel. After the bifurcation of post and Telegraph
department in 1980s, and with the creation of Department of Telecom by 1990s, eventually led to
the emergence of the State owned telegraph and telephone company BSNL. BSNL then continued
the telegraph services in India until it shut down telegraph services completely in July 15, 2013.

MARKET OVERVIEW
The growth trends in Indian telecom mirror those in the global industry .wireless has been the
principal growth engine, accounting for two third of the total telecom despite the regular
concessions to the private operators and the rapid pace at which poised to grow exponentially.
Wireless sector will become stronger in the unified licensing environment , and wireless has
already surpasses wire line connections . Tele density will come 20 percent in the next five yrs.
Beating the government of India’s target by three yrs , while telecom revenues will almost triple
from $9 billion in 2003 to $23-25 billion by 2007.

The wireless revolution will be fulfilled by several factors .The affordability of wireless for the
massive will be sustained on account of low tariffs , cheap handsets and attractive financing
schemes .Wireless operators will continue to focus on prepaid products in order to increase the
adaptation of wireless among the lower middle launched by the wireless operators. Wireless data
services will also became a growing revenue system. Some of operators have already deploys 3G
technologies on their networks .With further it will account for a significant portion of the wireless
revenue pie.

As of February 2004 the total mobile market had reached 31.67 million, of which 24.65 million
subscribers were GSM and 7.02 million were CDMA s
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3.2 FINANCIAL OVERVIEW OF BSNL

Public Sector is considered to be a powerful engine of economic development and important
instrument of self reliance and social justice. It is the part of economic and Administrative life that
deals with the delivery of goods and services by and of the government, whether national,
regional or local/municipal. The public sector undertaking has been given the recognition under
the Industrial Policy Resolutions of 1948 and 1956 and assigned a dominant role in the state in the
spheres of industrial, commercial and public utility activities. When it comes to the concept of
welfare state, the ideology of socialism and the adoption of economic planning then there is the
need of public sector undertaking. “Public sector undertakings or enterprises constitute those
which are fully or partly owned or controlled by the Central and State Govt.”

The BSNL is an important public sector undertaking providing Telecom Services since
2000. We have attempted here to analyze the financial performance of BSNL. The foundation of
Telecom Network in India was laid by British.

Century & history of BSNL is Linked with the beginning of Telecom in India.
Century the Telecom in India was operated as a Government of India wing. Earlier it was part of
the Erstwhile Post & Telegraph Department (P & T). In 1975 the Department of Telecom (DOT) was
separated from P & T. Subsequently in 1990s the Telecom Sector was opened up by the
Government for Private investment, therefore it became necessary to separate the Government’s
policy wing from Operations wing. The Government of India corporatized the operations wing of
DOT on October 01, 2000 and named it as Bharat Sanchar Nigam Limited (BSNL) which operates
as a public sector unit.
In pursuance of New Telecom Policy 1999, the Government of India formed a company
named “Bharat Sanchar Nigam Limited” (BSNL) on 15th Sept. 2000 since its corporization in Oct.
2000. The Financial Performance of BSNL is incomplete without the analysis of financial data
derived from the balance sheet and profit and loss account. BSNL has reported a 12% drop in its
net profit to Rs. 8940 crore for the fiscal year 2005-06 compare to Rs. 10183 crore in the previous
Year. This paper is an attempt to find out the causes for drop in the net profit of the BSNL.
OBJECTIVES:-

► To examine the reason for drop in its net profits.

► To evaluate the Financial Performance under the earning per Share (EPS)
► To evaluate the return on capital employed.

RESEARCH METHODOLOGY:-

The present study is diagnostic and analytic in nature and makes use of secondary data.
Relevant secondary data have been collected from BSNL website and Annual Report. The role of
management tool is important in analyzing the data and derives results from the information
collected through secondary data. The study is confined to 2 years of financial performance of
BSNL (Public sector undertaking). For analysis the present study makes use of sample table ratio
and trend analysis from inception 2004 and 2005.
ANALYTICAL TABLE AND EXPLENATION OF FINANCIAL PERFORMANCE
(BSNL) 2004-05, 2005-06:-
.
 15

Product line
1. BSNL LANDLINE
 Phone plus service
 Permanent connections
 Concession in rentals
 Shift of telephone.

2. BSNL MOBILE
 Postpaid
 Prepaid
 Unified messaging
 GPRs/ WAP/MMs
 Demos
 SMs and Bulk SMS
 BSNL Will

3. INTERNET SERVICES
 Network
 Broadband

4. TYPES OF ACCESS
 WI-FI
 Co-Location Service
 BSNL web hosting
 Internet tariff
 Dial up Internet
 SMS and bulk sms

5. BSNL BROADBAND
 Register Online
 Tariff

6. USO FUNDED RURAL BROADBAND

 FAQ
 Check Usage

7. BSNL MANAGED NETWORK SERVICES

 Free Phone Services
 Premium rate Services
 16

 India Telephone Card

 Virtual Private Network Company
 Voice Pal
 Universal Number
 Universal personal Number
 Tele voting

Revenue strategy

The telecom sector is the most competitive sector post liberalization. This has resulted in
movement from growth based business model that emphasized growth in numbers to profit
based model where the success is measured by margins. BSNL as part of the transition has to
adopt both cost reduction and revenue enhancement measures, which would directly impact
profitability.

It is the evident there is a declining trend in basic services and there is stagnation in cellular
revenues. Revenue maximization strategies will have two components, one internal to the
organization and the other external

The internal aspects would involve an initiative for change of process, technology, organizational,
structure , in this context , revenue assurance is the key to improving the bottom line of or BSNL.
This is proactive strategy to capture all revenues due for the services provided. Presently, BSNL
generates bill through different software across the zones of operations, which are distingrated
and provide only basic solutions. The industry standard for revenue leakage is about 3 to 7percent
of revenues, which in money terms translates to about 2100 corers for BSNL. Therefore plugging
revenue leakages is just the first and most obvious part of revenue assurance initiatives. The key
concerns for BSNL for effective revenue realization-

 The delay in customer billing after activation.

 Time lag between calls generated and billed

 Scope of fraud

 Non- availability of uniform database

 17

Therefore the focus should be on immediate implementation of CDR based billing.

This would require huge investment but the return would more than
commensurate .This software should be scrabble and be able to incorporate all the
next generation value added services. The implementation of CDR based system
will also generate the following benefits-

 Plugging of leakage of revenue

 Formulation of appropriate marketing strategies.

 18

STATEMENT OF PROFIT AND LOSS OF BSNL

Particulars For the year Notes for the
ended 31st year ended
march 2018 31st march
2017
INCOME

Revenue From Operations 2,615,326 2,565,481

Other income 184,309 147,308

Total 2,799,635 2,712,789

EXPENSES

Employee benefit expenses 1,543,584 1,375,782

Finance cost 21,964 35,147

Depreciation and amortization 602,317 833,643

expenses

Other expenses

-administrative expenses 1,100,765 1,040,235

-License and spectrum fees 224,330 205,236

TOTAL 3,492,960 3,490,043

 19

Profit//(loss)before (693,325) (777,254)

Prior period items and tax

Prior –period items(net) (19,094) (18,282)

Profit/(loss) before tax (712,419) (795,536)

Tax expense:

-Deferred Tax 10,443 7,092

Profit/(loss)for the year (701,976) (788,444)

Basic /diluted earnings per (14,04) (15,77)

share (in rupees)
 20

Cash FLOW STATEMENT

particulars March 14 March 13

Net profit /(loss) before tax (712,419) (795,536)

Cash flow from operating 165,145 63,543

activities.

Cash flow from investing (284,823) (244,072)

activities

Cash flow from financing 95,998 108,166

activities

Net decreses in cash and cash (23,680) (72,363)

equivalent(a+b+c)

Cash and cash equivalent as on 115,753 188,116

1st april 2017

Cash and cash equivalent as on 92,073 115,753

at 31st march 2018 .
 21

Objectives
 To lead telecom service provider.

 To provide quality and reliable fixed telecom services to our customer.

 To provide mobile telephone services of high quality and become no. 1 GSM operator in its
area of operation.

 To provide point of interconnection to other services provider as per their requirement

promptly.

 To facilitate R and D activity in the country.

 National plan target of 500 million subscriber’s base for India by 2012.

 Broadband customers base of 20 million in India by 2010 as per broadband.

COMPETITORS

BSNL competes with 10 other mobile operators throughout India. They are Airtel, Aircel, MTNL,

Reliance communication, tata docomo, Videocon, virgin mobile and Vodafone .

QUALITY OF SERVICES

BSNL goes by the motto “Connecting India, faster” and display the same at their homepage, BSNL,

offers seamless coverage in almost all urban and rural areas of India .

CENSORSHIP

BSNL enforces censorship of online content as per orders of Indian department of telecom.

Services provided by BSNL

BSNL provide almost every telecom service in India. Following are the main telecom services
provided by BSNL.Optical Infrastructure and DWDM: BSNL owns the biggest OFC network in india.
Alao the DWDM network is one of the biggest in the world. The DWDM equipments purchases in
open tender at BSNL are mainly of united telecom limited ,make which was declared lowest cost in
competitive bidding . Rest DWDM equipments are from Hawaii. The SDH equipments are mainly
from Texas network , Hawaii ,ZTC, ECI, UT STAR etc.
 22

Market share: as of 30 nov. 2013, BSNL had 12.9% market share in India and stands as 5th telecom
operator in India and 67% of market share in ADSL services.
Managed Network Services: BSNL IS PROVIDING COMPLETE TELECOM services solution to the
enterprises customers for example: MPLS connectivity, point to point leased lines and internet
leased lines.
Universal Telecom Services: Fixed wire lines services and landlines in the local loop(WLL) using
technology called bone and tarring respectively. As, of 30 June 2010 , BSNL had 75% of market
share of fixed line
Cellular mobile telephone services
: BSNL is major provider of cellular mobile telephone services using GSM platform under the
brand name cellone and excel (BSNL mobile).As of 30 June 2010 BSNL has 13.50% share of
mobile telephony in the country . It has 95.54 million customers using BSNL mobile.
WLL-CDMA Telephone Services: BSNL WLL(wireless in local loop)services is a services giving both
the fixed line telephony and mobile telephony.
Internet: BSNL provides internet access services through dial up connections (as sancharnet
through 2009) as prepaid. Net one as postpaid and ADSl broad band as bsnl broadband held
55.76% of the market share with reported subscribers base of 9.19 million internet subscribers
with 7.79% of growth at the end of the march 2010. Top 12 dial up service providers , based on
the subscribers’ base, it provide online games via its games on demand(GOD).

Documents used in financial analysis

The three main sources of data for financial analysis are a company’s balance sheet, Income
statement, and cash flow statement.

Balance sheet
The balance sheet outlines the financial and physical resources that a company has available for
business activities in the future. It is important to note, however , that the balance sheet only lists
these resources, and make no judgment about how well they will used by management .For this
reason, the balance sheet is more useful in analyzing a company’s current financial position than
its expected performance.

The main elements of the balance sheet are assets and liabilities assets generally include both
current assets will be converted to cash within one year such as accounts receivable ,inventory ,
and prepaid expenses, such as accounts receivable, inventory, and prepaid expenses ) and
noncurrent assets (assets that are held for more than one year and are used in running the
business, including fixed assets like property, plant and equipments long term investment, and
intangible assets like patents , copyrights and goodwill). Both the total amount of assets and the
makeup of assets accounts are of interests to financial analysis.

The balance sheet also include two categories of liabilities , current liabilities(debt that will come
due within one year , such as accounts payable, short term loans, and taxex) and long term
debts(debts long term liabilities are less important to analysts since they lack the urgency of short
 23

term debts, through their presence does indicate that a company is strong enough to be allowed
to borrow money.

Income statement
In contrast to the balance sheet , The income statement provides information about the company
performance over a certain period of time. Although it does not reveal much about the company
current financial condition .It does provide indications of its future viability. The main elements of
the income statement are revenues earned , expenses incurred , and net profit or loss, revenues
consists mainly of sales , through financial analysis may also note the inclusion of royalties ,
interest, and extraordinary items. Likewise, operating expenses usually consists primarily of the
cost of the goods sold, but can also include some unusual items.Net income is the “bottom line” of
the income statement .This figure is the main indicator of the company’s accomplishments over
the statement period.

Cash flow statement

The cash flow statement is similar to the income statement in that it records a company’s
performance over a specified period of time. The difference between the two is that the income
statement also takes into account some non-cash accounting items such as depreciation. The cash
flow statement strips away all of this and shows exactly how much actual money the company
have generated. Cash flow statements
 24

CHAPTER-4
 25

4.1 RESEARCH METHODOLOGY

Research methodology is the way to systematically solve the research problem. It may be
understand as a science of studying how research is done scientifically. In it I study the various
steps that are generally adopted by a researcher in his research problem along with the logic
behind them. It is necessary for the researcher to know not only the research method but also the
methodology. I not only talk off research method but also consider the logic behind the methods.
The use in conduct of my research study and explain why I am using a particular matter for
technique and why I am using others. So those research results are capable for being well
evaluated by others.

Research Objectives
Marketing research is a systematic collection, analysis, interpretation and reporting marketing
managers to solve some marketing opportunities. This particular research study was undertaken
and design with some predetermined objectives. The main objective of the study is to evaluate
the” Penetrate the Market for BSNL.

The objectives of the research are:

 To know about the popularity of BSNL plan among the consumers in India.
 To know about the brands of GSM and their market capitalization.
 To study about the competitive strength of BSNL.
 To know about the consumer’s preferences and expectations with regard to the choice of
GSM SIM for various plan of BSNL
 To motivate the dormant retailers for continuing trade with BSNL
 To create awareness in dormant retailers about benefits which offered by BSNL to small
retailers directly or indirectly?
 To know about the visibility of nearest competitors or rivals of BSNL in the Rajasthan
market.

Research Design
Research design is the arrangement of conditions for collection & analysis in a manner that aims
to combine relevance to the research purpose with economy in procedure.

Research Instruments
A complete questionnaire is prepared on the basis of consumer behavior & satisfaction with
regard to radial tires. The questionnaire was designed keeping the following point / question in
mind:
 Is the question required?
 Has the respondent experienced the situation described in the question?
 Is the question testing the respondent’s memory?
 Is the respondent likely to remember such information?
 Will the respondent part with the information voluntary?
 Can a single question be fragmented into small but multiple questions for better
understanding?
 26

Sampling Plan
a) Sample Frame
The sampling frame is the whole population since is based on the selling behavior of all units’
presents in the population that is the targeted to all the units in the population.
The process involved breaking up the various types educational institute of Jaipur city. This
division was made in such a way that each one major area of education get place in the study, be
it technical or professional or other area of study. There by each of these areas of study sample
were drawn randomly or by stratified sampling.
b) Sample Size
20 colleges and 200 dormant retailers of handset in prepaid sales. There are near about 225
educational institutions in Jaipur including all technical and professional institutions. So I select 20
colleges including boys and girls colleges, technical and non-technical colleges, professional and
non professional institutions. Hence in this project sample size is around one fourth of population
size. We just collect information about dormant retailers and ask question accordingly
questionnaire. A definite plan was drawn up for obtaining a sample from different areas of
educational institute of Jaipur. Thus sample size has been determined using a particular method.
The availability of resources in terms of infrastructure of field force. Time and cost was also taken
into account.

Sampling Design
A sample design is a definite plan for obtaining technique or procedure. The researcher would
adopt in selecting items for the sample.

Types of sample design: -

 Random sampling: - In random sampling, each of the population has a definite reassigned
probability of being selected in the sample.

 Stratified sampling: - Under stratified sampling the population is divided into several sub
population (strata) that are individually more homogeneous than the total population &
then select items from each stratum to constitute a sample.
Facts & Findings
The preparation of financial statements of Bharat Sanchar Nigam Limited, New Delhi (BSNL), for
the year ended 31st March 2014 in accordance with the financial reporting frame work prescribed
under the Companies Act, 1956 is the responsibility of the Management of BSNL. Based on my
analysis, I would like to highlight the following significant matters under Section 619(4) of the
Companies Act, 1956 which have come to my attention and which in my view are necessary for
enabling a better understanding of the financial statements and the related Audit Report.

A. Balance Sheet
a) Equity & Liabilities
1. Current Liabilities (Note No. 11) - Other Current Liabilities – Rs 6823.63 crore

Dot, after completing provisional assessment of License fee for the years from 2006-07 to 2008-
09, raised an additional demand of Rs 4076.62 crore apart from Rs 378.30 crore towards demand
for short payment of license fee of for the year 2012-13. The Company did not provide for the
same but disclosed it is a contingent liability. As the demand was based on assessment, the same
 27

should have been provided for. Non-provision has resulted in understatement of other current
liabilities as well as accumulated loss by Rs 4454.92 crore.

B. Statement of profit and Loss

1. Expenses - Other Expenses -License and spectrum fee - Rs 2243.30 crore
The does not include ` 1428.62 crore being the penalties imposed by the TERM Cell of DoT during
the year 2013-14. Non-accounting of the above as expenditure for the year has resulted in
understatement of expenses, Loss for the year and also Current Liabilities by ` 1428.62 crore.

2. Employee Benefit Expenses (Note No. 24) - Pension Contribution – Rs 889.14 crore

The above head is understated by Rs 707.03 crore due to charging of pension contribution of
absorbed employees on the bases of actually drawn pay instead of on maximum pay during 2011-
12, 2012-13 and 2013-14. This has also resulted in understatement of provision as well as
accumulated loss by Rs 707.03 crore.

C. General Comments
1. Persistent Non-Reconciliation of balances with MTNL As per accounts of BSNL for the year 2013-
14, the amount recoverable from and the amount payable to Mahanagar Telephone Nigam
Limited (MTNL) on current account have been disclosed as Rs 3517.95 crore and Rs 996.02 crore
respectively resulting in net recoverable amount of Rs 2521.93 crore from MTNL. However, as per
approved annual accounts of MTNL for the year 2013-14, the amount recoverable from and the
amount payable to the Company was Rs 4186.04 crore and Rs 1828.25 crore respectively resulting
in a net recoverable amount of Rs 2357.79 crore from BSNL. Thus, there was net difference of Rs
4879.72 crore in the receivable/ payable amounts between these two Government Companies
under the same Ministry.

Data Collection
Since the study, undertaken by me is descriptive research, I have concentrated on primary data
through survey and collection by secondary data.

Source of Data Collection

Data is collected from two methods:-
a) Primary data: - The questionnaire for data collection according to the information required from
the consumers was designed. The region undertaken for the research is Jaipur (Raj.). Different
areas selected for collection of data through questionnaire and interviews.
b) Secondary data: - Secondary data is collected from books, newspaper, magazine and websites.

4.2 SWOT ANALYSIS

9.1 What is SWOT Analysis?

SWOT (Strengths, Weaknesses, Opportunities, and Threats) is a tool used to provide a general or
detailed snapshot of a company's health. A SWOT analysis stands for Strengths, Weaknesses,
 28

Opportunities, and Threats and is a simple and powerful way to analyze your company's present
marketing situation.

9.2 Why use a SWOT Analysis?

In any business, it is imperative that the business be its own worst critic. A SWOT analysis forces
an objective analysis of a company's position vies a Vies its competitors and the marketplace.
Simultaneously, an effective SWOT analysis will help determine in which areas a company is
succeeding, allowing it to allocate resources in such a way as to maintain any dominant positions it
may have. Below are numerous, current example SWOT analyses for sale.

9.3 How to perform a SWOT Analysis?

A SWOT Analysis is an integral part of a marketing plan and can also be part of a business plan.
Knowing what a SWOT Analysis is and how to perform one is very important.

a) Strength
1. Knowledge. BSNL is ranked fastest growing company in Rajasthan state.
2. Relationship selling. We get to know our customers, one by one. Our direct sales force
maintains a relationship.
3. History. It has loyalty of customers and vendors. It is local.
4. The other company in telecom sector was merged different companies. But BSNL did not take
over any small telecom company. It establishes and develop broad network on its own.

b)Weakness
1. Company has a large physical network, so some times it is very difficult to manage all this in an
idle manner.
2. In comparison to strong competitors the visibility of BSNL is not satisfactory.

c) Opportunity
1. The financial strength of this is a backbone of India.
2. Training. The company provides in-depth training to their employees and frontline sales
executives.
3. Service. As BSNL target market needs more service, the competitors are less likely than ever to
provide it. Their business model doesn't include service, just selling.
4. The large number of population which have still do not have mobile could be target customer of
BSNL
5. The brand image of BSNL is strong plus point with BSNL so it is a great opportunity in front of
Reliance infocomm that they should avail this brand image.

d) Threat
1. The strong competitors of BSNL, Airtel just signed an agreement with Nokia by which Airtel will
increase its network across country.
2. Some companies like Idea planning to open its services in Rajasthan. So coming time is going to
be very tough and competitors.
 29

CHAPTER-5
 30

5.1 CONCLUSION

 BSNL offered some attractive plans only for big player of the market, which purchases the
products in bulk so that small retailer of the market suffered from lack of demand and other
problems.

 In almost ten zones above twenty per cent retailers express that price discrimination is the
basic cause to stop trade with of BSNL. Some big retailers offered the same product at lower
price. They directly or indirectly entertain the benefits offered by company.

 Almost twenty percent said that they focused on core business because it’s negatively
affecting their core business. So their overall sales decreased. Frequent change in schemes also
make uncomfortable to focus on core business.

 Ten to fifteen per cent retailers are not satisfied with the services provided by of BSNL.
Particularly in area small retailers are not satisfied with salesman services. Sometimes salesman
did not give additional benefits offered by company whereas some retailers demanded hoarding
and other things.

 Almost more than twenty five percent retailers are suffered from lack of demand and less
margin. If a same product available at cheaper rate at big players shop then why they purchased
from small shops. Price discrimination is in the root of lack of demand.

 Less than ten percent stop trade due to other reasons like some suffered from financial
problems, some opened a new business and some due to familiar problems.
 31

5.2 SUGGESTIONS

 Removal of fixed termination charges will help BSNL serve its customer better. It will come
up with better offers in next financial year. Customers will be able to get more affordable
services.
 BSNL should also plane such kind of schemes, which are benefited to small retailers. Big
players of the market later on directly or indirectly affect the sale and performance of
company and direct sales associates.
 BSNL can start a training and awareness program for small retailers and employees.
 Make sure that its salesman maintains its brand name and prestige of company.

 Company should not change the schemes frequently because it creates non-comfort
ability among small retailers.
 Know our self-Our Duties and Responsibilities-Execute judicially and sincerely.
 Daily review previous day’s tasks-analyze-take remedial action for lapses-get solutions for
problems-guide sub-ordinates properly-right thing-right direction.
 Focus on Customer Satisfaction- Know them-know their needs- Fulfill their needs.
Effective use of CSCs and CCCs-single window system-avoid making customer to run pillar
to post. Know their hopes, dreams, needs, problems, and desires and then set about to
help them improve their lives with our information and products or services.
 Make a smile for a while-All the evils will go away. Receive the customers pleasantly-guide
them and treat them properly.
 Provide Quality Products / Services – provide consistent quality and value in what you do.
 Use Skilled and Experienced Management Team – Use them at right place-Give suitable
work-Review the performance periodically.
 Identify Loyal, Committed and Productive Staff – Select effective and efficient employees-
Provide them all infrastructures to improve productivity.
 Innovative culture – continuously improving/bettering what and how the business does.
 Solid Financial Management Systems – good control and performance analysis
mechanisms-Remove loopholes for frauds. Safeguard integrity in financial reporting.
 Effective supervision-direct and indirect methods-collect materials impartially-take
appropriate action.

 Access to Capital to Develop and Grow – adequate funds to grow and sustain the
business.
 Competitive advantage – establishment and maintenance of a unique point of difference.
 Quality Planning – establishing the destination and plotting course.
 Good Corporate Governance-Promote ethical and responsible decision making-make
timely and balanced disclosure- Remunerate fairly and responsibly.
 Make automation-then and there clear all works-move to paperless work.
 32

 Socialize with our customers – Social networking allows socializing and learning more
about our customers. In turn, you will become better at meeting our clients’ needs and
increase our bottom line.
 Make time to strategize – Take decisions at appropriate time. Indecisiveness makes all
things to collapse. A goal on paper is just words or an idea of what we want to have. A
strategy or plan is also required. How are we going to achieve our goals? Set time aside on
a regular basis to analyze where we are, what we want, and how we’re going to get there.
 Reward loyalty – Whether we establish a formal loyalty program where customers receive
points or discounts based on how much they spend or we simply give out a discount to
loyal customers from time to time, people love to receive acknowledgement. Rewards let
our customer know they’re appreciated and they foster continued loyalty.
 Become an expert – There’s always room for more learning and the more knowledge we
have about our industry or product, the more you’ll be able to display this knowledge.
Teach our clients something new and we will profit in the end.

 Take time to set goals – Goals are an important part of every business because they
motivate us to achieve. Make a list of goals specific to our business and steps to take to
reach those milestones.
 Continuing education – One thing is true, there is always more to learn. Set aside time
each year to improve our knowledge and skills.
 Pay attention to the competition – Even if you are the industry leader, pay attention to
our competitors. We might be surprised what we can learn from other experts and then
we can position our self competitively.
 Find Best Practices: Every industry has its own best practices or ways of doing things that
are tried and true. Avoid wasting money and time reinventing the industry is generally a
good approach.
 Motivate Staff: Talented and motivated staff members can bring on big improvements in
business.
 Know our Limits: Every successful businessman should have a clear idea of their
limitations. By knowing our limitations, we can manage our resources and find help in area
of weakness.
 33

5.3 ANNEXURE

BSNL Sales Coverage in Education Institutions of

Jaipur.

1. Name of the College:

Courses No. of Seats No. of No. of Localities Outsiders

Offered Boys Girls

2. No. of Faculty Members:________________________________

3. Hostel Facility:
 Yes
 No
If Yes,
No. of Hostellers No. of boys No. of girls

4. Canteen:
 Yes
 No
a) Telecom Operator Available.
 BSNL
 Reliance
 Airtel Tata
 Indicom
b) Can we place BSNL stocks?
 Yes
 No
If Yes, Contact Person: _____
Tel. No.: _______________

5. nearest Telecom Retailers:

Name: 1__________________________2__________________________
Address:
Tel. No.:
Distance from college:
 34

6. Nearby Markets: l.________________

2.________________

7. Visibility of BSNL
 Excellent
 Good
 Average
 Bad

8. A) Availability of Other Operators:

 Airtel
 Vodaphone
 Reliance
 Tata-indicom

b) Visibility of Other Operators:

 Airtel
 Vodaphone
 Reliance
 Tata-indicom

9.Remarks: ________________________________

Retailer Retention
Name of the Retailers -------------------------------------------------
Address -----------------------------------------------------------------
Zone No. ------------------------------------------------------
Still Deal in pro BSNL ducts (Y/N)
6. Total sales / monthly :
7. Total sales of BSNL :
35
 36

5.4 BIBLIOGRAPHY
Books:
 Agrawal M.R., Financial Management, Garima Publication, Second
Edition 2010.
 Avadhani V.A., Securities Analysis and Portfolio Management,
Himalaya Publishing House, Ninth Edition 2008.
 Chunawala S.A., Financial Management, Himalaya Publishing
House.
 Gordon, Natarajan, Management of financial services, Himalaya
Publish House.
 Gupta V.k., Marketing of Financial Services, Mohit Publication, Third
Edition 2004.
 Kothari C.R, Research Methodology, New Age International
Publisher.
 Max Manfred Benjamin, Method Research, Sanga Publication, New
Edition.

Websites:

1. http://www.slideshare.net
2. http://en.wikipedia.org
3. http://www.financialexpress.com/news
4. http://www.managementparadise.com
5. http://www.bsnl.co.in
6. www.google.co.in
7. in.answers.yahoo.com
37