No BSNL IPO until turnaround: DoT

Dylan Bushell-Embling
23 Sep 2010
00:00

The Indian government has no intention of going public with state-owned operator BSNL until the company has turned around financially.

The Department of Telecom (DoT) told the nation's public accounts committee that an IPO will be postponed until BSNL's performance improves in order to get the right valuation on the company, the EconomicTimessaid.

Any plans for an IPO will likely be scrapped unless the turnaround is successful, a senior DoT official told the Business Standard.

The official added that the delay was also partly to do with the unexpectedly high bid price for the recent 3G auction – state-owned operators BSNL and MTNL were required to match the winning bids during the auction in exchange for guaranteed spectrum.

BSNL reported its first ever loss in FY10, swinging to a deficit of 18.2 billion rupees ($400.4 million) from profit of 5.7 billion rupees.

A committee set up to address the operator's poor performance, the Sam Pitroda panel, has recommended the government divest up to 30% in the company – a plan sharply opposed by employee unions.

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