Increasing competition and falling revenues have forced Bharat Sanchar Nigam Ltd to estimate a financial burden of over Rs 7,000 crore for 2002-03.
Of this, around Rs 4,000 crore is on account of taxes, loan servicing and dividend payments, and another Rs 3,000 crore because of falling tariffs in the long-distance sector.
In a letter to telecom secretary Vinod Vaish, BSNL chairman Prithipal Singh has said: "BSNL is facing constraints because of the changes introduced in the past. Increased competition and regulatory policies have resulted in steep reduction in tariffs and revenue per connection. Caught in this pincers of adverse trends, BSNL shall be hard put to maintain the huge legacy of network inherited from the department of telecommunications."
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BSNL has said it is operating around 10 million rural telephones and 50 per cent of its urban connections are unremunerative.
These connections have been operated with the revenue from the top-end customers and the long-distance services.
"Private operators are now targeting the high paying customers and competition in the long-distance sector has resulted in a steep fall in long-distance tariffs,