Now, BSNL chief backs
IPO for expansion
,
TIMES NEWS NETWORK & AGENCIES
NEW DELHI/ KOLKATA: The telecom establishment appears
completely confused about Bharat Sanchar
Nigam Ltd's (BSNL) initial
public offer (IPO), billed as India's biggest.
First came a statement last Monday from communications
minister A Raja saying that his ministry was contemplating an IPO for the
public sector giant where the government will dilute a 10% stake, estimated to
be worth $10 billion or Rs 40,000 crore.
Then, on Thursday, Raja took a U-turn, with his office issuing a statement that
BSNL has no plans to come with an IPO in the immediate future. "The matter
will be discussed internally and then a suitable decision will be taken in this
regard. An IPO for BSNL will be issued if considered appropriate," the
statement said. The telecom department was facing huge pressure from the
Left-backed unions against the proposed IPO.
However, on Sunday, BSNL chairman Kuldeep
Goyal made it clear that faced with a stagnating
turnover and a possible marginal dip in profitability in the current financial
year, the state-owned company may have to take the IPO route to fund expansion.
"The IPO may be required for BSNL," Goyal
said.
Goyal said, during 2008-09 the company's turnover was
likely to hover at the last year's level of Rs 40,000
crore.
He said that stagnation in revenue would be primarily due to falling tariffs
and there could also be a dip in profitability due to rising expenses. In the
last financial year, BSNL's net profit was Rs 7,800 crore.
Goyal told reporters that the telecom service
provider has drawn up huge investments plans for expansion. While BSNL plans to
spend Rs 18,000 crore
during 2008-09 for various developmental plans, the investment figure for 2010
has been pegged at Rs 60,000 crore.
Goyal said for the moment, BSNL was having cash
reserves of Rs 30,000 crore,
which would take care of immediate investment requirements. For future
resources, the company might have to go for an IPO, he said. "We will have
an internal discussion regarding the IPO," he said.
He said as the fixed wireline service of BSNL was
witnessing negative growth, the major revenue drivers of the company in the
coming days would be mobile, broadband and other value-added services like IPTV
and VOIP