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BSNL seeks Rs 14,700 cr for BWA spectrum and VRS support

Last Updated: Wednesday, August 7, 2013 - 18:32

New Delhi: State-owned BSNL is understood to have sought Rs 14,769 crore from the government for returning the spectrum for broadband wireless services and providing voluntary retirement to over 71,000 employees.

It has also sought permission for the lease or sale of its real estate.

Sources said BSNL has submitted its demand to the Group of Ministers (GoM), which is looking at ways to revive the loss making telecom firm.

BSNL has sought Rs 6,724.51 crore as return of BWA spectrum fee and Rs 8,045 crore as VRS support for 71,861 employees as on April 1, 2013, sources added.

The company is also believed to have sought government's permission for sale or long lease of real estate property by making changes in its memorandum of association (MoA) and articles of association (AoA).

The company said it will be able to save Rs 4,276 crore if it gets the desired support from the government.

"If the BWA spectrum is reimbursed, there will be an annual interest cost reduction of Rs 740 crore and the telco will save Rs 3,200 crore as salary outgo if VRS support is approved," sources said.

A profit making company till 2008-09, the firm's decline started after that. As on March 2013, its losses stood at around Rs 8,198 crore.

The company attributes the decline to huge payment of wage revision which cost it Rs 2,092 crore, payment of Rs 18,500 crore as 3G and BWA spectrum charges, rising staff cost which was about 53 percent of its revenues in 2012-13, high cost of capital borrowing and hyper competition in the market.

The silver lining is that the operator is optimistic about the future. As consolidation has started in the telecom sector and operators have begun rationalising their customer base, BSNL has increased its market share to 13.55 percent as on March 2013, from 12.70 percent last year.

Data usage is growing at the rate of 15 percent annually and BSNL plans to retain its current market share over the next five years.


First Published: Tuesday, August 6, 2013 - 21:20
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