BSNL mulls partnership with foreign telecom

BSNL mulls partnership with foreign telecom
PTI
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First Published: Sun, Jun 28 2009. 02 57 PM IST
Updated: Sun, Jun 28 2009. 02 57 PM IST
New Delhi: Amid falling revenues and profits, state-owned BSNL is mulling a proposal to induct a strong foreign telecom operator as a strategic partner to reverse its fortunes, a move that may yield more money to the government than from listing or disinvestment.
“A strategic partner will be a better option...provided the government is favourable to that idea,” a source, working closely on the listing of the PSU and involved in negotiations with the employees unions, said.
BSNL’s valuation has been pegged at about $100 billion and the PSU has a paid up capital of about Rs5,000 crore ($1.04 billion).
BSNL had reported a revenue of Rs38,000 crore and a net profit of Rs3,000 crore in the last fiscal and this year the company has projected a dip in both total income as well as net profit, mainly due to lower average revenue per user (ARPU) and if the trend continues for few years the company’s long term plans may suffer.
Asked why a foreign strategic partner should be favoured over listing and disinvestment, sources said “...because when they come they can have a say in the management and change the face and culture of the company.”
There are many big foreign telecom operators, like AT&T, France Telecom and others, who are looking at entering the Indian market and these companies are in talks with some of the private service providers.
BSNL sources said the government must look at this also along with other options. “If this happens, it can redefine the rules of the game in the country and it would be desirable for the government to look at this option also.”
BSNL has a subscriber base of nearly 50 million, whereas private operators like Bharti Airtel and Vodafone Essar have moved ahead much faster in the recent months.
The PSU added only 0.50 million users in May 2009 compared to 1 million in the previous month, BSNL officials said, adding that the company was expecting to add 1 million in June.
The company is in the process of expanding its GSM capacity by a massive 93 million lines, for which a tender has been floated and BSNL may place orders soon with the equipment suppliers.
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First Published: Sun, Jun 28 2009. 02 57 PM IST