It’s official now that state-owned telecom service provider Bharat Sanchar Nigam (BSNL) has run into losses for the first time.
Outgoing BSNL chairman-cum-managing director Kuldeep Goyal on Saturday said that the telco had posted a loss (after tax) of Rs 1822.65 crore in the financial year 2009-10. The BSNL board meeting adopted the audited accounts of the PSU on Friday.
Although Goyal gave reasons behind the losses, he listed the current revenue position of the telco as the biggest regret during his tenure as the CMD. “I would have been happy if I could change the financial condition of the organisation,” Goyal said replying to a question from DNA.
Although it (the loss) is a temporary phenomenon due to 3-year arrears paid to the employees, the financial condition is a regret, he said. Besides the wage bill expenditure, other reasons behind the financial losses at BSNL are slow revenue growth, spectrum fee for 3G and broadband wireless service, and decline in landline subscriber numbers, according to Goyal.
BSNL revenue in 2009-10 was Rs32,045.41 crore, 10.4% less than that in the previous financial year due to tariff reduction, intense competition and drop in fixed line connections. The wage revision arrears with effect from January 2007 has cost BSNL Rs2900 crore.
HR director Gopal Das will take over as the CMD of BSNL, till a fulltime chairman is found by the Search Committee appointed by the government. The committee is looking for a CMD within the government and outside. To a question on whether a CMD from the private sector could translate into less government interference in the workings of the organisation, Goyal said “no”. Interference does not stop with that, he said.
Going forward, BSNL is targeting a revenue of Rs34,500 crore for the financial year 2010-11 to turn profitable again. On subscriber projections, Goyal said BSNL is aiming to add 20 million mobile subscribers during the year. On market revenue share, he pointed out that BSNL was the second largest with 19.5 per cent of the total pie, after the number one player Bharti Airtel at over 29% share.
On the issue of BSNL IPO, Goyal said it was status quo and that employees’ resistance to the listing of the PSU continued. On whether the government would refund the money it has paid towards 3G and BWA sectrum fee, Goyal replied, “We haven’t heard on that yet.”
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