BSNL borrowed Rs 1,320 cr from the market for capex in 2011-12

Telecom Lead India: Cash-strapped BSNL borrowed
Rs 1,320.47 crore from the market to meet capital expenditure during 2011-12,
according to Minister of State for Communications and IT Milind Deora.

In a written reply to the Lok Sabha, Milind Deora said, “BSNL has fully
met its operational expenses through internal accruals during financial year
2011-12. However, for capex authorisations, market borrowings were partially
resorted to, which stood at Rs 1,320.47 crore as on March 31, 2012.”

The State-run mobile service provider
posted 8 percent decrease in revenue to Rs 29,688 crore in 2010-11 against Rs
32,045 crore in the previous fiscal. Its capital expenditure for cellular
during the period was Rs. 8138 crore.


The main reasons attributed to financial crisis in BSNL
are large legacy of workforce whose salary and wages are around 50 per cent of
the revenue.


However, unviable rural operations as social obligation,
maintenance of legacy telegraph system, payment of 3G and broadband wireless
access (BWA) unfront spectrum cost to the government and maintenance
of legacy wireline systems are some of the reasons behind the financial crisis,
according to Economics Times.


BSNL cash reserve declines to Rs 2,500 crore in 2011 from
Rs 30,000 crore two years ago

BSNL’s cash reserve dwindled to Rs 2,500 crore in 2010-
2011 from Rs 30,000 crore two years back.


Other public sector operator MTNL too has been
battling losses. MTNL reported a net loss of Rs 929.77 crore for the
quarter ended December 31, 2011.

According to Deora, the financial crisis in MTNL is mainly due to cash outflow of
Rs 11,097.97 crore towards the 3G and BWA upfront spectrum cost to the
government and high staff costs which is more than 80 per cent of the revenues
of MTNL.

“MTNL is spending Rs 34.40 crore (approx) per month on payment of pension
to the employees absorbed from the government, who have opted for pension for
their combined service in the government and MTNL,” Deora said.


The Department of Telecom (DoT) is taking various steps to improve
the financial health of the state-run entities,” Deora added.


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