State-run telecom operators turn red

August 17th, 2011 - 8:07 pm ICT by IANS  

New Delhi, Aug 17 (IANS) Even as India’s telecom sector continues to witness a boom in terms of subscriber additions to the network, the profitability of two state-run service operators have gone into the red, and made them seek financial assistance.

Giving this information to the Lok Sabha, Minister of State for Communications Milind Deora Wednesday said the losses of Bharat Sanchar Nigam amounted to Rs.1,823 crore in 2009-10 and that for Mahanagar Telephone Nigam was placed at Rs.2,611 crore.

Deora said several proposals were under consideration to make their operations viable once again, including the merger of these two entities. This apart, another proposal was to merge the loss-making Indian Telephone Industries (ITI) with Bharat Sanchar Nigam.

“Bharat Sanchar Nigam has submitted a proposal to the department of telecommunications seeking financial assistance to run commercially unviable services, which is being examined in this department,” Deora said in a written reply.

The comment comes in the wake of the two companies only witnessing a marginal increase in the subscriber base, even as most of the dominant players in the private sector are continuing to witness huge additions to their client lists.

India has the second largest mobile telecom network in the world, after China, with 850 million subscribers.

Deora said the authority that oversees the recast of loss-making state-run units, the Board for Reconstruction of Public Sector Enterprises has recommended either the merger of ITI or its takeover by Bharat Sanchar Nigam as a separate entity.

“The board has also recommended that there is no reason for Mahanagar Telephone Nigam to continue as a separate entity. This could be brought under BSNL as a subsidiary,” he said.

A departmental committee is examining all issues, he added.

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