Bharat Sanchar Nigam Ltd has written to the Planning Commission and the finance ministry seeking reimbursement of the annual licence fee amounting to nearly Rs 2,000 crore (Rs 20 billion).
While BSNL has been getting reimbursements for the past two years, the Budget 2003-04 has made no such provisions.
While the Budget proposal was as per the earlier agreed package that BSNL would have to pay licence fee from the third year of operations after corporatisation, BSNL officials said the public sector undertaking was still reeling under heavy financial burden and therefore, the time span for reimbursement had to be extended.
"We have written to the government explaining our position. We have sought reimbursement of licence fee for another year," an official said.
BSNL has projected a financial burden of over Rs 7,000 crore (Rs 70 billion) for 2003-04. Of this, around Rs 4,000 crore (Rs 40 billion) is on account of taxes, loan servicing and dividends payments. BSNL operates around 10 million rural telephones and 50 per cent of its urban connections are non-profitable.
BSNL officials said post corporatisation, the telecommunications major had to undertake an additional burden of Rs 40,000 crore (Rs 400 billion) over the next five years.
"Paying licence fee will further worsen our financial position," officials said.
For 2002-03, BSNL has to pay Rs 550 crore (Rs 5.50 billion) as corporate tax, Rs 500 crore (Rs 5 billion) in dividend on equity, Rs 1,250 crore (Rs 12.50 billion) as additional staff costs, and Rs 2,881 crore (Rs 28.81 billion) as spectrum charges.
For 2003-04, BSNL is expecting a total burden of Rs 6,951 crore (Rs 69.51 billion) if the licence fee is not reimbursed, which is slated to go up to Rs 9,054 crore (Rs 90.54 billion) in 2004-05.
BSNL is also facing a huge crunch on its bottomlines due to decreasing tariffs. It has already lost nearly Rs 3,000 crore (Rs 30 billion) owing to steep reduction in STD tariffs in 2002 and is expected to further take a hit with recent cut in STD rates from Rs 9 a minute to Rs 4.80 per minute for calls above 500 km.
BSNL has already lost 20-25 per cent of STD traffic to cellular firms owing to lower cell-to-cell STD tariffs.
Meanwhile, its cellular business is raking in good business with nearly 1.5 million connections since the service was launched in October 2002.
BSNL is also expecting additional revenues from value-added services like broadband and Internet access, and is also planning a foray into the international long-distance sector next year.
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