BSNL mulls leasing out factories to private companies

In an effort to garner revenues, loss-making PSU BSNL is mulling a revival in the fortunes of seven of its manufacturing facilities through tie-ups with private telecom players.

"We are exploring the potential of a tie-up of our company with private telecom players to revive our seven non-performing telecom manufacturing units," a BSNL source said.

BSNL's seven factories, located at Jabalpur, Richhai, Bhilai, Kolkata, Gopalpur, Kharagpur and Mumbai, are involved in manufacturing a range of telecom products, including SIM cards, telecom towers, telecom poles, modems, pay phones and accessories.

BSNL, once the country's flagship telecom company, posted a net loss of Rs 1,823 crore on revenue of Rs 32,046 crore in 2009-2010 and is also likely to post losses for the last financial year ended March, 2011. The company had a net profit of over Rs 10,000 crore in 2005-06.

In terms of mobile subscribers, BSNL has been relegated to fifth position from second just a few years ago as it has failed to match competition from private players like Bharti, Vodafone, Idea and the Tatas.

The only service provider in the country with manufacturing facilities, BSNL's factories are in a state of disarray and they lack the technology to compete with global hardware majors.

"All the seven factories have prime land, sheds, machines and some workforce. It should be feasible if private companies are given these assets on a lease to start activities there. This will eventually help workers getting salaries," the source added.

Earlier, in 2006, BSNL had made some efforts to revive the fortunes of its Kolkata manufacturing base by tying up with some telecom equipment manufacturers.

The proposed joint venture involved the manufacture of a million CDMA-based mobile handsets and an equal number of fixed wireless telephones, but did not get off the ground.

Recently, the Department of Telecom (DoT) had instructed all 24 territorial circles of BSNL to realise 25% growth in their revenues on a year-on-year basis, failing which they will be denied their monthly fund allocation.

BSNL's chief general managers in all 24 territorial circles have been categorically asked to mop up monthly revenues from the broadband, Wimax, mobile, value-added services and leased circuits businesses.