It is learnt that Bharat Sanchar Nigam Limited (BSNL)?s losses for the year ended March 2010 stood at nearly Rs 60 billion, whereas the company had announced a loss of Rs 18.23 billion for the same period.
In fact, the losses would have been much higher without the Rs 41.32 billion income from non-telecom-related activities. Of this, about Rs 25 billion was from interest on its cash reserves, which too dipped to Rs 286.60 billion from Rs 400 billion in 2008.
The financial performance of BSNL has been deteriorating over the years as it could not expand on time to compete with private mobile phone firms. BSNL spokespersons have pointed out that political interference coupled with legal challenges and probes into its tenders for mobile networks resulted in the operator being able to increase its mobile capacity by a mere 20 million since 2005, even as the country added over 450 million mobile users during this time.
BSNL?s initial tender for 63 million global system for mobile communications (GSM) in 2006 was slashed to 23 million by former minister of communications and IT A. Raja. This tender was further cut to 14 million lines after Nokia Siemens Networks (NSN) that was slated to supply 40 per cent of the contract failed to do so. Its follow-on tender for 93 million GSM lines was cancelled after a series of controversies.
The Parliamentary Accounts Committee had recently pointed out that the ?single most important reason? behind BSNL?s decline was failure of the tendering process, leading to non-supply of equipment , which eventually resulted in the stare-owned operator losing market share.
