DoT panel wants BSNL divestment deferred by 2 years

A high-level committee in the Department of Telecommunications (DoT) wants disinvestment in state-owned telco Bharat Sanchar Nigam Ltd (BSNL) to be pushed by at least two years.

This committee, comprising top DoT officials, was set up to consider the recommendations of Sam Pitroda, Prime Minister Manmohan Singh’s advisor on public information, infrastructure and innovation, on revamping BSNL.

The DoT panel has also raised the issue of high cost of spectrum for broadband wireless access (BWA), and has stressed that it’s unviable for BSNL to offer wireless broadband to rural areas unless the government compensates the telco.

Speaking on disinvestment, the committee has said that the focus now should be on improving the performance of BSNL during the next two years.

“After improving the performance, disinvestment can be done in stages to get the right valuation,” it has added. This time
can also be utilised to make the organisation ready for listing, according to the panel.

Pitroda had earlier recommended disinvestment of 30% government stake in BSNL in stages. He had suggested further disinvestment after a performance review in three years’ time. Last year, the BSNL board had recommended 10% disinvestment and listing of the company.

Also, a recent finance ministry discussion paper had named BSNL as one of the PSUs that could be disinvested. The paper has listed out 28 PSUs in the services sector for disinvestment.
Former BSNL chairman Kuldeep Goyal had however indicated earlier this year that the disinvestment of the telco was not expected any time in the “immediate future”.

On broadband wireless access, the DoT committee has said that “BWA spectrum has been acquired by BSNL for providing broadband in rural areas.”

However, it has stated that “as the price of the spectrum has gone much higher than the reserve price, it may not be a financially viable proposition for BSNL to provide broadband in rural areas through BWA spectrum.”

It has added that “BSNL should be suitably compensated in terms of capex and opex for providing broadband in rural areas through BWA.”