BSNL’s subscriber count is surging. These four stocks could benefit.

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Indian telecom market operates as an oligopoly, with a few major players offering similar services and greatly affecting pricing. When one company lowers prices the others typically follow suit, but the reverse is not always true. We saw an instance of this when Reliance Jio entered the market, prompting price cuts across the board.

Recently, large private firms such as Reliance Jio, Bharti Airtel and Vodafone Idea increased their tariffs by 11-25%, while BSNL's tariffs have remained relatively stable. Its competitive pricing, especially in the lower brackets, has brought it more than 2.75 million new customers, many of them through mobile-number portability. This has helped the company offset its previous losses.

Before we explore how this could be an opportunity for BSNL, let's first learn more about the company. Bharat Sanchar Nigam Limited (BSNL) was formed by corporatising the erstwhile department of telecom services on 15 September 2000. It generated an operating revenue of ₹193.billion in FY24, clocking 1.1% year-on-year growth.

This fell short of the government's target of ₹200 billion, which was part of a larger ₹3.2 trillion revival package. The primary contributors to BSNL's operating revenue were the basic, cellular, broadband, and enterprise segments, accounting for 18.5%, 36.2%, 19%, and 26.3% of total revenue, respectively. Revenue from the basic and enterprise segments increased 19.4% and 9.1% to ₹35.8 billion and ₹36.6 billion, respectively.

Notably, revenue from cellular services and the enterprise segment declined during the year. Cellular services revenue fell 6% to ₹70.1 billion, while enterprise business revenue decreased 4.5% to ₹51 billion. The decline in cellular services revenue could be