Bharat Sanchar Nigam Limited (BSNL) is likely to announce a substantial dip in revenues in 2010-11. This is mainly owing to its purchase of 3G and BWA spectrum and delays in the execution of its expansion plans.
It is believed that the operator?s results are currently being audited. This process is expected to be completed in August. BSNL had been granted 3G and BWA spectrum before last year?s auction and hence, the operator and Mahanagar Telephone Nigam Limited (MTNL) did not participate in the auction process.
Spectrum was given to both BSNL and MTNL, on the condition that both companies matched the best price paid by the highest bidder in the respective telecom circles. Therefore, BSNL paid Rs 101.86 billion for 3G spectrum and Rs 83.13 billion for wireless broadband spectrum in mid-2010 after the spectrum auctions were concluded.
According to company officials, the incumbent paid the required amounts despite insufficient reserves, as it was not granted a time extension.
Moreover, the cancellation of various tenders for augmenting capacity and delays in the process of equipment procurement for utilising existing capacity is also expected to impact the company?s revenue.
In fact, BSNL?s revenue has been declining on a yearly basis. In financial year 2010, the company reported a 7.4 per cent decline in total revenues.
