Friday, May 27, 2011
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Committed to turnaround BSNL in six months: Sibal
Tags: BSNL, Sibal, Telecommunication
Assuring full support from the government, Telecom Minister Kapil Sibal today said he is RELATED ARTICLES
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committed to turnaround BSNL, which has been running into huge losses for the last two years.
The state-run telecom operator has been facing stiff competition from private operators and has been forced to rethink its strategy.
"BSNL mobile and landline subscriber base is declining, broadband subscribers are also not matching the pace of private players. So it is time BSNL tighten up its shoes and I am committed to turaround the organisation in the next six months," Sibal told reporters here.
BSNL has failed to cash in on its huge land and network assets, which is one of the largest in the country.
Once the country's flagship telecom company, BSNL posted a net loss of Rs 1,823 crore on revenue of Rs 32,046 crore in 2009-2010. The company had net profit of over Rs 10,000 crore in 2005-06.
"BSNL has a unique position because it has a government backing with the private operators don't have. Unique in terms of network and coverage, but has not been able to earn a good name because the organisation is running into huge losses for the last few years," Sibal said.
BSNL CMD R K Upadhyaya had said the company is mulling entering into new business areas in the telecom sector to turnaround and may also approach the government to come out with a scheme to unlock the value of real estate owned by it.
"The government will provide all the support required to BSNL to turn things around," Sibal said.
In its projections to the government, BSNL is expected to to post a net loss of Rs 2,725 crore on revenue of Rs 31,738 crore during 2010-11, and the loss is expected to narrow to Rs 623 crore on revenue of Rs 36,569 crore during the current fiscal year (2011-12).
After defence and railways, BSNL is the country's largest landholder. Its properties span 3,500 towns across India worth thousands of crores, making it the largest state-owned companies in terms of land assets.
So far, BSNL's land holdings are under the Department of Telecom (DoT).
The PSU has slipped from number two position in number of telecom subscribers to number four in view of intense competition from the private players.
The PSU has a big handicap of not being present in India's two top markets -- Delhi and Mumbai -- as in these two metros another PSU MTNL operates.
The government is also contemplating merging BSNL and MTNL to help both the companies come back to profitability.