DoT proposes holding back BSNL listing till completion of restructuring
16 Apr 2010
The Department of Telecom (DoT) has proposed to put on hold plans to list Bharat Sanchar Nigam (BSNL) pending completion of the restructuring of the company.
The Sam Pitroda-led committe had suggested a 15-point restructuring plan to turn around the public sector unit's fortunes.
The teleco is expected to post losses of over Rs2,000 crore this fiscal.
In its note for the Telecom Commission, the Department of Telecom has stated that the proposal to go for an initial public offering should be held back till the Pitroda panel suggested fundamental changes including restructuring the company's board and absorption of Indian Telecom Service officers, were implemented. According to DoT's expectations, BSNL's enterprise value would be higher after the changes and a divestment at that stage would result in higher revenues to the government.
While BSNL management had proposed a divestment of 10 per cent stake through an IPO, the Pitroda panel recommended 30 per cent divestment in the PSU after the restructuring.
As regards the panel's suggestion for hiving off BSNL's real estate into a land bank, DoT had already undertaken worked out a plan for retention of certain assets for its field units and the balance was being transferred to BSNL with the signing of a transfer agreement. BSNL management had been agreeable to most of the panel's suggestions.
The major suggestion was for adoption of an outsourcing model through managed services for its operations relating to call centre, IT and network, appointment of an eminent person from the private sector chairman who would be supported by the best professionals selected from the market at market rates, reduction in workforce strength by one lakh, and spinning off the tower infrastructure into a new subsidiary to unlock value through a strategic sale or separate IPO.
