State-run BSNL's losses widened to about Rs 8,850.70 crore during 2011-12 mainly due to regulatory expenses and non-receipt of funds for its rural landlines operations.
The company had reported a loss of Rs 6,384.26 crore in 2010-11.
Total revenue of the company for 2011-12 declined to Rs 27,933.5 crore during the year, compared to Rs 29,687.62 crore it posted a year ago.
"During 2011-12, we were in position to arrest losses. However, due to some regulatory issues there was adverse impact of around Rs 3,100 crore on our financial performance," BSNL Chairman and Managing Director R K Upadhyay told PTI.
BSNL's profit started declining continuously from Rs 10,183 crore in 2004-05 before recording a loss in 2009-10.
During 2010-11, BSNL losses rose to Rs 6,384 crore mainly due to hefty outgo on salaries and expenses borne by the PSU for procuring 3G and BWA spectrum.
Upadhyay said the company did not receive around Rs 1,600 viability gap funding for its rural landline operations from government which pulled down BSNL's income.
There was also an additional expenditure of around Rs 1,500 crore on licence fees and spectrum charges following a Supreme Court order during 2011-12, he added.
"Our income was less by about Rs 1,600 crore due to non- receipt of Viability Gap Funding for rural landline operations.
"Expenditure were more by Rs 1,500 crore due to additional licence fee and spectrum charges paid even for previous years," Upadhyay said.
The Telecom Commission, an inter-ministerial body, in its meeting on September 3 is expected to discuss issue of providing viability gap fund to the company.
Though BSNL CMD did not share any projections on financial performance of revenue for the ongoing fiscal but he said that the company is making effort to utilise its assets, building capacity in network for handling large subscriber base and exploring new sources of income which will help company reduce losses.
According to Telecom Regulatory Authority of India, the company had 69.08 per cent and and 10.52 per cent market share in landlines and wireless (mobile telephony) connections on June 30, 2012.