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BSNL to invest Rs 230 bn for expansion

State-run telecom giant BSNL announced an investment of Rs 230 billion for some major expansion plans, including connecting 50,000 villages.

business Updated: Sep 07, 2007 17:17 IST

State-run telecom giant Bharat Sanchar Nigam Ltd (BSNL) on Friday announced an investment of Rs 230 billion for some major expansion plans, including connecting 50,000 villages.

The company, which recently awarded multibillion dollar contracts to leading vendors such as Nokia and Ericsson for 10 million and 13 million GSM lines respectively, is planning to add 10 million additional mobile subscribers and a market share of 33 per cent by the end of current fiscal (2007-08).

This is based on the firm's rural expansion, where it is planning to connect 50,000 villages either through mobile or landline connectivity.

"We have planned major expansion and growth targets for the current financial year. In the last year we have not been able to grow and were going slow which is why we had come down to number three position in terms of subscribers. By 2008 we should be back at number two," BSNL's new chairman and managing director Kuldeep Goyal told reporters here.

The PSU is also planning to ramp up its presence in the CDMA market by adding 3.6 million users to reach to the level of six million.

BSNL is also waiting to place orders for the procurement of 3G (third generation) lines, which it indicated could be with the existing vendors and the contract would be worth Rs 172 billion.

"The 3G orders would be placed once the government comes out with the spectrum policy. If the first phase of roll out goes well then it would be with the existing vendors and the size of the deal would be around Rs 17,200 crores (Rs 172 billion)," Goyal said.

Recently, it launched the IPTV (internet protocol television) service in Pune, Bangalore and Kolkata. It is now planning to launch it soon in other major cities as well.

Denying any move to hike its call tariffs in the near future, Goyal said: "Our tariff are customer friendly and we don't believe in hiking it any time now. Our tariffs are affordable and transparent."

However, according to SD Saxena, director (finance), BSNL: "We are very much concerned along with other players in the industry that with lowering of tariffs the operators are also facing lowering of revenues."

Thus, in order to tackle the reducing revenues the company is planning to introduce a host of value added services to attract more subscribers.

"We would be introducing new services every month to tackle the lowering of revenues. One such would be the facility of money transfer for NRIs for which we are in talks with many companies," Saxena added.