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Kapil Sibal, minister of communications and IT has begun the process of reviving Bharat Sanchar Nigam Limited (BSNL), which recently announced a loss of Rs 18.23 billion for the year ending March 2010. Top officials from Sibal?s ministry are expected to meet their counterparts from the finance ministry, planning commission and the department of industrial policy & promotion amongst others.
BSNL, once a monopoly in domestic telephony, has been deteriorating in financial performance over the years. On the agenda for today?s meet is the implementation of the Sam Pitroda committee recommendations, which includes a 30 per cent stake sale by listing BSNL and cutting its staff by 100,000. In October 2010, an internal panel of the telecom ministry, under ex minister A. Raja had rejected most of the key proposals in it.
In late 2009, Prime Minister Dr Manmohan Singh, worried about the steep decline in BSNL?s profitability over the years, called in Sam Pitroda along with banker Deepak Parekh to suggest measures for revival. They in turn had recommended, apart from a strategic stake sale and cutting of staff strength, raising funds from sale of its infrastructure such as signal towers and real estate.
The incumbent?s performance has been declining every year since 2007. For the year-ended March 2010, its losses stood at Rs 59.55 billion For the fiscal year ended March 2009, BSNL showed Rs 5.75 billion as profit. In 2007-08, its net profit was Rs 30.09 billion on interest income of Rs 40.04 billion.
The DoT?s internal panel that looked into Pitroda committee?s recommendations had said that BSNL?s IPO must be deferred for two years to allow the incumbent to improve its performance and get the right valuation. It had also rejected the Pitroda?s committee?s proposal to allow BSNL to bring in top professionals, including a CEO from the private sector, and said that implementing such a move selectively for top-level positions, and also in just one PSU would have wider repercussions.
