DoT in favour of BSNL, C-DOT & ITI synergyin the operations of the public sector units under it, all of which have a profitability problem- 29/7/2011

(DoT) says it is trying to “find greater synergy” in the operations of the public sector units under it, all of which have a profitability problem.DoT in favour of BSNL, C-DOT & ITI synergy

Mansi Taneja / New Delhi June 29, 2011, 0:11 IST

Officials say this is only way to staunch losses, face private competition.

The department of telecommunications (DoT) says it is trying to “find greater synergy” in the operations of the public sector units under it, all of which have a profitability problem.

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The units are Bharat Sanchar Nigam Ltd, Mahanagar Telephone Nigam Ltd (MTNL), ITI and the Centre for Development of Telematics (C-DOT). BSNL has already begun discussion with sister-concern MTNL, which offers services in Delhi and Mumbai, on combining operations in the enterprise segment.

DoT has set up a committee to find ways to have “better synergies” among all these bodies. “BSNL is present in the services sector, ITI is in the manufacturing segment and C-DoT is in research and development (R&D). These are the three corners of the telecom business. This will enable them to optimise their resources efficiently, as well as compete better with the private sector,” a senior DoT official told Business Standard.

The synergy will mean that C-DOT does R&D for products being developed by ITI and for use by BSNL. Similarly, ITI will have to manufacture products for the use of BSNL. “Unless this kind of coordination is there, it will be difficult to get maximum value out of this,” the official added.

BSNL has also been asked by DoT to streamline performance, financial and marketing. Besides this, it has been asked to focus on projects and initiatives taken by the government and complete these within a specified time frame. The projects include the national optic fibre network, the national mission in education through the use of information and communication technology and the National Knowledge Network, the official added.

DoT had earlier asked BSNL and MTNL to synergise their operations as the merger of the two is not feasible for now. BSNL has also started discussions with private players to lease out its telecom towers. Communications minister Kapil Sibal had already said the government would turn around BSNL in the next six months.

BSNL had a loss of Rs 1,823 crore in financial year 2009-10, for the first time since inception in 2000. The loss for 2010-11 is expected to be Rs 2,500 crore.