BSNL expansion plans take off, to pump in Rs 22,800 cr

New Delhi, September 7: The state-owned Bharat Sanchar Nigam (BSNL) will invest Rs 22,880 crore in this financial year for expansion of its network. The company has already given an order to Ericsson for supplying GSM equipment and setting up network of 13.12 million lines. It would soon give an order to Nokia-Siemens for procuring equipment of 9.63 million lines.

“The work is to be completed in 12 months,” said Kuldeep Goyal, CMD of BSNL. Currently, BSNL’s GSM network is over stretched and it has no spare capacity for giving new phone connections in many places.

The PSU will invest Rs 22,880 crore in 2007-08 for expansion of its Telecom services. While Rs 7,417 crore is slated for mobile services, nearly Rs 6,200 crore is set aside for fixed, WLL and broadband and internet services. Value-added services will get a maximum investment of Rs 9,230 crore.

Goyal also informed that the company has placed an order with Ericsson at Rs 3,700 per line and the same price will be retained for the contract with Nokia-Siemens Networks. This puts the entire cost of the deal at Rs 8,640 crore — half of the original Rs 17,000 crore.

BSNL posted a revenue of around Rs 39,715 crore and net profit of about Rs 7,806 crore in 2006-07. Goyal attributed the decline to non-reimbursement of licence fee to the tune of Rs 560 crore by the Government and very low tariffs leading to low average revenue per users.

“We are targeting to capture number two position by 2008, besides a 10 per cent increase in our revenues in the current fiscal,” said Goyal.

For increasing the subscriber base, it is planning to launch various value added services (VAS), which includes money transfer through mobile phones and e-ticketing. Also in the pipeline is introduction of VoIP services, which will allow calls to the US and other countries at just Re 1 per minute. It is also in the process of making PCO as a ‘One Stop Shop’ for providing all its services such as bill distribution and collection and information center among others.

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