State-run BSNL’s losses widened to about Rs 8,850.70 crore during 2011-12 mainly due to regulatory expenses and non-receipt of funds for its rural landline operations.

The company had reported a loss of Rs 6,384.26 crore in 2010-11. Total revenue declined to Rs 27,933.5 crore from Rs 29,687.62 crore.

“During 2011-12, we were in a position to arrest losses.

However, due to some regulatory issues there was adverse impact of around Rs 3,100 crore on our financial performance,” BSNL Chairman and Managing Director R.K. Upadhyay told PTI.

BSNL’s profits started declining continuously from Rs 10,183 crore in 2004-05 before recording a loss in 2009-10.

Outgo on salaries, spectrum procurement

During 2010-11, BSNL losses rose to Rs 6,384 crore mainly due to hefty outgo on salaries and expenses borne by the PSU for procuring 3G and BWA spectrum.

Upadhyay said the company did not receive around Rs 1,600 viability gap funding for its rural landline operations from the Government which pulled down BSNL’s income.

Licence fee, spectrum charges

There was also an additional expenditure of around Rs 1,500 crore on licence fees and spectrum charges following a Supreme Court order during 2011-12, he added.

“Our income was less by about Rs 1,600 crore due to non-receipt of viability gap funding for rural landline operations.

“Expenditure were more by Rs 1,500 crore due to additional licence fee and spectrum charges paid even for previous years,” Upadhyay said.

Viability gap funding

The Telecom Commission, an inter-ministerial body, in its meeting on September 3 is expected to discuss the issue of providing viability gap funding to the company.

Though BSNL CMD did not share any projections on financial performance for the ongoing fiscal, he said that the company is making effort to utilise its assets, building network capacity for handling a large subscriber base and exploring new sources of income which will help company reduce the losses.

According to the Telecom Regulatory Authority of India, the company had 69.08 per cent and 10.52 per cent market share in landlines and wireless (mobile telephony) connections as on June 30, 2012.

(This article was published on September 2, 2012)
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