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Rs 80 billion annual loss from wireline business: BSNL

November 06, 2010
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Bharat Sanchar Nigam Limited (BSNL) may obtain additional subsidies to support its landline business, according to news reports. Also, it may be compensated for its Wi-Max operations in rural India. Earlier, a government panel that was asked to consider the recommendations of the Sam Pitroda committee had suggested these measures to improve the operator’s revenue streams. These proposals are outside the recommendations of the Pitroda committee, which were considered by this panel.

Apart from the Pitroda report, this panel has also endorsed BSNL’s long pending demand that it needs to be adequately compensated for its loss making operations in rural India, especially its landline businesses there. BSNL has maintained that its landlines in rural India, a bulk of which it is forced to maintain on account of social commitments, is causing it heavy losses, to the tune of Rs 80 billion annually.

In its report to DoT, the panel said that there is a huge burden of legacy systems and manpower in BSNL. The burden on BSNL is further compounded by sustenance of loss making services emanating from rural as well as other socially desirable activities undertaken by it towards fulfilment of the government’s social obligations.

It added that BSNL may not be able to sustain this burden on its own in a fiercely competitive market. This burden needs to be assessed afresh, separately keeping in view the provisions of NTP 99 as well as other government policies and BSNL compensated suitably.


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