The Hindu Business Line : BSNL drops IPO plans this fiscal

ADC impact
The company may also post a lower profit of up to Rs 8,000 crore in 2005-06 due to lower ADC receipts and lower reimbursement of their licence fee paid to the Government.
The company has asked the Government to consider higher rate of ADC and full reimbursement of licence fee.

New Delhi , April 10

THE state-owned Bharat Sanchar Nigam Ltd (BSNL) has decided not to push ahead with its plans for the proposed initial public offering (IPO) in the current financial year, according to a senior company official.

"The Government has been writing to us... we have taken advice from bankers and they have suggested that this is not an appropriate time to go for an IPO," Mr S.D. Saxena, Director (Finance), said.

On the time period by which the company would be ready to hit the capital market, he said, "We need 12 to 18 months to clean up our accounts."

The company may also post a lower profit of up to Rs 8,000 crore in 2005-06 against Rs 10,000 crore notched in the previous year, as a result of lower levy (Access Deficit Charge) received from private operators and lower reimbursement of their licence fee paid to the Government.

Announcing the provisional figures for the year, the Chairman and Managing Director, Mr A.K. Sinha, said the Access Deficit Charge (ADC) was lower by about Rs 2,000 crore while the reduction in the reimbursement of licence fee was about Rs 1,600 crore in 2005-06 compared to the previous fiscal. With the net effect of reduction on both the accounts adding to about Rs 3,600 crore, the company has asked the Government to consider higher rate of ADC and full reimbursement of licence fee.

Mr Sinha said the gross income had gone up by nine per cent to Rs 39,500 crore from over Rs 36,000 crore in the previous fiscal.

BSNL plans to invest Rs 17,000 crore in 2006-07 for expanding infrastructure in rural areas, in new broadband connections and spreading optical fibre network across the country.

On the connection side, the company added 82.27-lakh subscribers in all fixed, WLL and GSM mobile services registering a growth of 55.6 per cent in 2005-06.

Although there were disconnections in the fixed line ranging between 30-35 lakh but combining the two — fixed and WLL — the company registered net addition of 5.12 lakh new subscribers during the year gone by, he said.

Subscriber target

Going forward, BSNL has fixed an aggressive target of adding 100-lakh new subscribers during the current fiscal. The Its total subscriber figure of BSNL (fixed, WLL and mobile) as on March 31, stood at 551.62 lakh. Of this, GSM mobile connections were 171.63 lakh and the balance were fixed and WLL lines.

BSNL today said that about 18 leading telecom and IT companies including Nokia, Ericsson, Motorola, Cisco and HP have expressed interest in bidding for 45.5-million GSM lines to be added by it. the state-owned company.

"Eighteen companies have bought the tender document. Virtually all the big players are there like such as Siemens, Nortel, Nokia, Motorola, Huawei, Sun Micro Systems, HP and some other smaller companies," Mr Sinha told presspersons.

French equipment manufacturer Alcatel, which has bagged an order for about 18-million lines through reserved quota for ITI, would also be eligible for bidding for rest of the zones. BSNL would be adding 63 million lines but 30 per cent is reserved for another PSU ITI. Alcatel is the indirect beneficiary of this move by virtue of its tie-up with ITI.

BSNL has not stopped any company from bidding saying that ultimately the conditions laid down in the tender document would apply for all the interested parties, he said.

The bidders would be able to seek clarification with regard to tender document by April 21, and BSNL would hold the bidders' conference on April 28. The company would give reply to all clarification by May 3, paving the way for and opening of the bids on May 10.

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