BSNL hopes to double net profit this fiscal

After posting a dismal performance for the last fiscal, Bharat Sanchar Nigam Ltd (BSNL) is expecting to almost double its net profit for the current fiscal.

The public sector behemoth expects to post a net profit of Rs 3,000 crore for the current fiscal. It registered a 77 per cent dip in its net profit during last fiscal at Rs 1,444 crore as against Rs 6,312 crore recorded during the previous year.

"We have achieved Rs 21,000 crore revenues till December end and expecting to reach Rs 28,000 crore revenue target, which might be a bit difficult to achieve," S D Saxena, director (finance) of BSNL said at a press conference here.

The telecom PSU's revenues have touched Rs 25,892 crore last fiscal, up by 5 per cent from Rs 24,299 crore during financial year 2001-02.

To check the capacity exhaustion problem that the organisation is facing in the GSM segment, the company has taken up a massive expansion plan, wherein it is adding 2.5 million lines capacity in the first phase, involving Rs 3,000 crore investment. The company had already placed orders with Motorola and Ericsson for the equipment.

While Motorola will supply for the southern region, Ericsson will supply for the north and eastern region and the organisation is yet to finalise the vendor for western region.

Subsequently the company plans to expand capacity by another 10 million lines with Rs 10,000 crore investment. The investments for expansion will primarily come from internal accruals and a part of it might be raised through debt, Saxena indicated.

The company is also planning to complete its proposed voluntary retirement scheme for the employees of the organisation within the next one year.

The public sector telecom company is primarily targeting the telephone operators, non-technical staff and employees working in the telegraph service for the VRS scheme.

"We are presently discussing the modalities of the plan with the employees' union and the scheme details will be announced soon," Saxena, said.

We do not want to enforce the scheme on the employees and make it voluntary in the true sense, he added.

The organisation has about 3.5 lakh employees on its rolls.

When asked about going for a unified license across all the circles in the country, Saxena replied that it costs about Rs 2,500 crore to do so.

It is counter-productive to go for a unified license in some of the circles and our board is presently debating about which circles are better in terms of RoI when we apply for such licensing, he said.

In another significant development, BSNL has decided to go for the second phase of its National Information Backbone (NIB II) with a Terabyte of bandwidth.

The project, which involves an investment of Rs 2,500 crore is meant for offering corporate subscribers with a slew of services related to voice and data.

It is expected to be completed in the next three to four years. The organisation presently has NIB I in place, which offers a bandwidth of 108 mbps for its Internet subscribers. It has a Internet subscriber base of about 7.5 lakh.

Aiming high

• The company's net profit slid 77 per cent to Rs 1,444 crore in last fiscal from Rs 6,312 crore in 2001-02.
• Its revenues rose by 5 per cent to Rs 25,892 crore in last fiscal from Rs 24,299 crore in the preceding fiscal.
• The company has taken up a massive spread plan to check the capacity exhaustion problem that it is facing in the GSM segment