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BSNL profitability comes under cloud
Shalini Dagar
New Delhi : Less than six months after the birth of the mega telecom corporation Bharat Sanchar Nigam Limited (BSNL), its profitability is under a cloud, according to senior BSNL officials. "One very big assumption on which the profitability of BSNL hinges is the Universal Service Obligation (USO) fund. This is nearly to the tune of Rs 10,000 crore," said a senior BSNL official. He further added: "It is highly unlikely that the government will reimburse that amount in its entirety to BSNL, its role in rural connectivity notwithstanding. This would seriously impact the profitability of the corporation." "The private operators prefer to pay penalties rather than connect villages," he explained. In such a scenario, the entire burden of providing rural telphony falls on BSNL. The mammoth public sector undertaking is also under pressure to perform in a severely competitive scenario, with not just private players eagerly snipping at its heels and the long distance revenues being reduced as a result of tariffrebalancing. With technologies such as Internet telephony being artificially kept out of the market, it is just a matter of time when the Pandora's box of declining revenues open up. "We are all living a nightmare," said this official.The corporation was formed with much fanfare in Occtober this year, with assets estimated at Rs 63,000 crore (book value) and over 3.7 lakh employees. The Department of Telecom Services (DTS), BSNL's erstwhile parent had shown a profit of Rs 7,500 crore last year. In a bid to retain profitability, BSNL is now looking at alternative means of generating revenues. The Virtual Calling Card (VCC) has been a major success story for BSNL. The focus in the coming years therefore, is likely to be on such value-added services and targeting the towns with relatively low density. Copyright © 2001 Indian Express Newspapers (Bombay) Ltd.
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