In return, promises to turn profitable by 2018

Loss-making Bharat Sanchar Nigam Ltd (BSNL) has asked the Government to foot half its salary bill as part of a revival plan. In a presentation made to the Empowered Group of Ministers on Wednesday, BSNL said that the Government could either pay Rs 1,670 crore a year or give it a one-time soft loan of Rs 8,045 crore spread over ten years, to meet the salary burden.

The telecom company’s total employee remuneration, including pension, ex-gratia payments and other benefits, is expected to touch Rs 14,500 crore this fiscal year, on revenue of Rs 28,047 crore.

BSNL has estimated that its losses will mount to Rs 5,163 crore this year, and if the Government accepts the revival plan it expects to turn profitable by 2018.

The Government has already approved a bailout plan for BSNL and MTNL, which includes refunding Rs 12,000 crore paid by the two companies to buy broadband spectrum in 2010. In addition, BSNL is planning to hive off its tower assets into a new subsidiary and offering to share CDMA spectrum with private operators. It is also looking to monetise its telecom factory infrastructure and real estate by creating technology parks.

According to the presentation to the ministers, BSNL hopes to increase its mobile user base from 98 million to 140 million with a 50 per cent increase in data revenue.

This will help BSNL’s revenue from mobile services grow from Rs 12,000 crore this fiscal year to Rs 19,000 crore by financial year 2019. Pushing its case for Government support, BSNL said it has contributed Rs 65,000 crore between 2001 and 2012 to the national exchequer in the form of taxes and licence fees.

The company is an important part of major Government initiatives, including the National Optical Fibre Network project and rural telephone coverage.

The ministers’ group, however, did not take any decision and will meet again to discuss the proposals.

(This article was published on January 8, 2014)
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