Govt gets nod to offload 10% in BSNL

Meet chaired by PM concedes suggestion for immediate sale.

A high-level review meeting chaired by Prime Minister Manmohan Singh today conceded a suggestion for immediate sale of 10 per cent government equity in state-owned telecom giant BSNL.

A government official confirmed the development. The meeting reviewed challenges before the telecom PSUs BSNL and MTNL, including issues of expansion. “Discussions were held on various means of reviving the financial health of both the PSUs, which, of late, have been posting losses and losing market share in the mobile market,” the official added.

Telecom Minister A Raja, BSNL Chairman and Managing Director Kuldeep Goyal, MTNL Chairman and Managing Director R S P Sinha and Telecom Secretary P J Thomas were among those who attended the meeting.

IT Adviser to the Prime Minister Sam Pitroda is understood to have suggested immediate disinvesment of 10 per cent government equity in BSNL, a proposal that is expected to be conceded at the top-most level of the government soon. The management of BSNL had so far not been able to proceed with the divestment process, due to opposition from the PSU unions.

The review assumes importance in the wake of deteriorating revenue of telecom PSUs, particularly BSNL, which is confronted with a controversy of over Rs 35,000 crore expansion plan.

There was no official word on what transpired during nearly an-hour-long meeting late this evening.

The issue of the Rs 35,000 crore tender for GSM equipment by BSNL also figured during the meeting amid reports that the matter be referred to the Central Vigilance Commission (CVC). The telecom ministry officials are understood to have suggested that it would be premature to invoke CVC on the issue.

Concerned over BSNL’s falling revenues, the PMO had asked the company top brass and A Raja to look into causes and find ways to improve the performance. The PSU had reported the lowest net profit among the telcos of a paltry Rs 575 crore on a revenue of about Rs 36,000 crore last financial year.

Besides, BSNL has been consistently losing market share in the mobile telephone business due to the stiff competition by private players and its inability to expand network on time.

BSNL has failed to undertake any capacity addition in the mobile network space in the last two years. Its latest 93 million GSM lines contract has run into a Central Vigilance Commission probe, stalling the expansion.

Of late, to expand its reach, BSNL had been looking out for opportunities in the overseas market, including South Africa and Sri Lanka.

Meanwhile, in a separate development, the Telecom Regulatory Authority of India (Trai) has sought details from various service providers on their tariff plans after Bharti Airtel complained of predatory pricing by new operators.

Trai may soon issue a consultation paper on tariff-related issues. “We have asked operators for their tariff plans, we will come up with a consultation paper on this, if necessary. There is no fixed timeline for it,” Trai Chairman J S Sarma said.

Some of the operators had already given their plans. Trai would look into their economics and then take a final decision, he said.

The telecom industry is witnessing a huge tariff war after the entry of new players.

The prices in the mobile market, which were already the lowest in the world, have come down to a new low of one paisa per second.