Connecting BSNL Employees / Subscribers 4 Growth of BSNL: BSNL borrowed Rs 1,320 cr for capex in 2011-12

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BSNL borrowed Rs 1,320 cr for capex in 2011-12

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NEW DELHI: State-run BSNL borrowed Rs 1,320.47 crore from the market to meet capital expenditure during 2011-12, Minister of State for Communications and IT Milind Deora has said.

"BSNL has fully met its operational expenses through internal accruals during financial year 2011-12. However, for capex authorisations, market borrowings were partially resorted to, which stood at Rs 1,320.47 crore as on March 31, 2012," Deora said in a written reply to the Lok Sabha.

BSNL's losses have more than tripled to Rs 5,997 crore in 2010-11. The company had registered a loss of Rs 1,823 crore in 2009-10.

BSNL had reported the highest net profit of over Rs 10,000 crore in 2005-06 but since then its profits have been falling and it reported first net loss in 2009-10.

The main reasons attributed to financial crisis in BSNL are large legacy of workforce whose salary and wages are around 50 per cent of the revenue.

"The expenditure on this account has increased due to implementation of wage revisions," Deora said.

Other reasons include operating economically unviable rural operations as social obligation, maintenance of legacy telegraph system, payment of 3G and broadband wireless access (BWA) unfront spectrum cost to the government and maintenance of legacy wireline systems which is quite expensive.

BSNL has contributed Rs 2,024 crore and Rs 1,399 crore towards pension fund during 2009-10 and 2010-11 respectively, Deora added.

Other public sector operator MTNL too has been battling losses.

MTNL had reported a net loss of Rs 929.77 crore for the quarter ended December 31, 2011.

Deora said the financial crisis in MTNL is mainly due to cash outflow of Rs 11,097.97 crore towards the 3G and BWA upfront spectrum cost to the government and high staff costs which is more than 80 per cent of the revenues of MTNL.

"MTNL is spending Rs 34.40 crore (approx) per month on payment of pension to the employees absorbed from the government, who have opted for pension for their combined service in the government and MTNL," Deora said.

He said that the Department of Telecom (DoT) is taking various steps to improve the financial health of the state-run entities.

The steps taken by DoT include strengthening of stable revenue streams through focus on broadband and enterprise business, focus on top 100 cities for revenue, aggressive push on data usage and value added services among others, he added.

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