BSNL FY06 net likely to drop 20%

Bharat Sanchar Nigam (BSNL) is likely to report a 20% fall in net profit at Rs 8,000 crore in FY06 when compared with Rs 10,183 crore in FY05.

The company has reported a 9% increase in operating income at Rs 39,500 crore in FY06 from Rs 36,000 crore in FY05 on account of rising customer additions.

A K Sinha, chairman and managing director of BSNL, attributed the fall in profit to the reduction in reimbursements and write-backs, and lower access deficit charge in FY06. The company got only Rs 700 crore as reimbursements and write-backs during FY06 as against Rs 3765.68 crore in the previous fiscal.

"We have urged the government to consider a higher rate of ADC and have also sought full reimbursement of licence fee," Sinha said.

BSNL has also dropped its IPO plans during the current fiscal. "We have consulted our bankers who advised us that this is not the appropriate time to go for an IPO. We need 12 to 18 months to clean up our accounts," S D Saxena, director (finance) of BSNL, said.

Replying to a query on its recent mega tender for 45.5 million lines, Sinha said 18 companies, including equipment majors like Nortel, Alcatel, Lucent, Ericsson, Nokia Cisco and Motorola, had bought applications for the tender.

Bidders would be able to seek clarifications on the tender until April 21, following which, BSNL will hold a bidder's conference on April 28. The company will reply to all clarifications by May 3 and bids would be opened on May 10, 2006.

BSNL added 82.27 lakh new subscribers - a growth of 55.6% - during FY06. "We have fixed a target of 100 lakh new subscribers for the current fiscal. We plan to invest about Rs 17,000 crore in FY07, and the focus will be on adding infrastructure especially in rural areas, including giving out new broadband connections and spreading optical fibre network across the country," Sinha said.