BSNL to invest Rs 60,000 cr in three years

State-run telecom giant Bharat Sanchar Nigam (BSNL) today announced an investment of a whopping Rs 60,000 crore in next three years to expand its GSM, Broadband and WLL services, a move that would help the PSU achieve top position by 2010.

"We will invest over Rs 20,000 crore every year till 2010 for expansion, which will include laying down additional lines for GSM, WLL and broadband," BSNL Chairman and Managing Director Kuldeep Goyal said.

Most of the investment would come through internal accruals as the PSU has sufficient reserves, he said, but did not rule out borrowing from the market at a later stage.

Although BSNL's profits would come under severe pressure as subsidy on rural operations has been withdrawn and the levy charged from private players would also be phased out from next year, yet Goyal was hopeful of meeting the requirement internally.

From a subscriber base of over 30 million mobiles now, representing a market share of about 22 per cent, BSNL is aiming to regain its third position, after Bharti Airtel and Reliance Communications, in the near future as it hopes to get additional capacity by January 2008.

"By 2010 we have planned to become number one GSM player with at least 33 per cent market share. Government has a target of 500 million connections from about 240 million now. We have plans to add about 100 million new subscribers by then," Goyal added.

The PSU has been losing market share since the last one year due to delays in adding capacity in GSM and it was pushed to number four in the list of mobile operators after Bharti Airtel, Reliance Communications and Vodaofne Essar.

The PSU has placed a contract for adding 22.75 million GSM lines, 13.12 million of which are with Swedish vendor Ericsson and negotiations are on with Nokia-Siemens for the remaining lines.

The project got delayed as the one of the bidders, Motorola, challenged its disqualification from the tender process in the court. The process started again only after Motorola withdrew the case about three months back.

The contract would end the capacity crunch in BSNL's mobile services, which has resulted in a loss of subscribers.

The original tender was for 45.5 million lines, including about 25 per cent 3G lines. Award of contract was delayed with the change of guard at the ministry as A Raja wanted to bring down cost per line and also reduce the tender size by 50 per cent.

On the expansion front, BSNL would also add 2 million lines to provide broadband on Wimax technology while another 2 million lines for broadband would be added on copper wires. It would also augment its capacity of WLL by 3 million lines.

"With these 4 million lines for broadband, we will cover about 50,000 villages across the country," Goyal said.

BSNL has about 33 million users of its fixed line service with 3 million WLL users across the country.

The company has already invited Expression of Interest for the Wimax project which is likely to be worth around Rs 2,000 crore.