Kolkata, Jan 20 Faced with a stagnating turnover and a possible marginal dip in profitability in the current financial year, government-owned BSNL may have to take the IPO route to fund future expansion plans.
“The IPO may be required for BSNL”, chairman and managing director of BSNL Kuldeep Goyal said on Sunday. On the sidelines of a seminar organised by TDSAT, he said, during 2008-09 the company’s turnover was likely to hover at the last year’s level of
Rs 40,000 crore.
Goyal said that stagnation in revenue would be primarily due to falling tariffs. There could also be a dip in profitability due to rising expenses, he said. Last financial year, BSNL’s net profit was Rs 7,800 crore.
Goyal told reporters here that the telecom service provider had 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 had 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 initial public offer (IPO), he said. Recently, the government had announced plans to dilute 10% of BSNL’s equity through the IPO route to fund expansion plans.
“Nothing had been decided as of now. We will have an internal discussion regarding the IPO,” Goyal said. Goyal also 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.
“Mobile services would be key driver of growth”, Goyal said. By 2008-09, BSNL plans to provide 13.5 million GSM connections, three million broadband and two million limited mobility WLL lines. Goyal said BSNL was also planning to introduce mobility on the CDMA platform. On launching 3G services, he said that BSNL was awaiting spectrum allocation from the government. “We are ready. We will launch as soon spectrum is given to BSNL”, he said
