State-run telecom company Bharat Sanchar Nigam (BSNL) is likely to announce a substantial revenue loss in 2010-11 mainly due to payment it made for buying 3G and BWA spectrum and delay in execution of expansion plans.
"The results are being audited. We can not predict the final outcome but price paid for 3G and BWA spectrum is going to hit company's revenue," a senior BSNL official closely involved with the development of financials of the company told PTI.
The government has given a slot of 3G spectrum and BWA (Broadband Wireless Spectrum) to both state-run telecom companies BSNL and MTNL before the auctions were held and they were kept out of the auction process.
The spectrum to both public sector companies was given under condition that the two will have to match the best price paid by the highest bidder in the respective telecom circles.
As a result, BSNL paid Rs 10,186.58 crore for 3G spectrum and Rs 8,313.8 crore for wireless broadband spectrum in mid-2010 after completion of the spectrum auction.
"Despite insufficient reserves, the PSU paid the money as it was not given any time extension. We were also not given option to pick and choose circle as a business case," the official said.
He said that the payment made by the company was going to hit BSNL's top as well as bottom lines.
"We don't expect much decline in revenue from services. There should be hardly drop of 2% but we may see dip in other income," the official said.
Another BSNL official mentioned that cancellation of various tenders for augmenting capacity and delay in equipment procurement for utilising existing capacity was also going to impact revenue of the company.
There are various tenders like managed lease line network, Mpls Based Next Generation Transport (MNGT), mobile network expansion, etc which the company have not been able to execute till date. BSNL is losing out opportunity in the market, said BSNL official involved in company's network operations.
BSNL revenue has been declining on yearly basis. In FY10, the company reported 7.4% decline in total revenue to Rs 27,913.44 crore from 30,169.42 crore. The PSU reported its first loss of Rs 2197.48 crore in FY10.
The senior official said the dip in revenue is possible but range of decline cannot be estimated at present.
BSNL expects to complete auditing of financial result in August.
