Why BSNL going to loss?

Upadhyay said that the costs incurred for third generation ( 3G) and
wireless broadband access spectrum had resulted in the company's
cash reserves crashing to a mere Rs 2,500 crore by March 2011 from
around Rs 40,000 crore few years. "Spectrum charges has really
brought us badly down and made a serious dent in our cash
reserves," Upadhyay added.

Another factor that led to depletion of reserves was capital
expenditure incurred over the last few years, he said. On the PSU's
survival in the backdrop of depleting reserves and mounting losses,
he said, "We definitely do not need any bailout package from the
government. But what we do need is adequate compensation from
the government for our efforts in meeting social obligations as a
state-owned company."

Upadhyay said BSNL is operating in rural and highly remote areas
that are commercially unviable to offer telecom services.

"We want the government to compensate us for that. We are in
talks with the government and expect to receive the compensation,
which we don't consider a bailout package," he said.

The government had compensated BSNL partially for three years
from the universal service obligation fund to the tune of around Rs
2,000 crore a year but discontinued the compensation as the
scheme ended in July this year.





Why BSNL is going at loss? BSNL CMD says.-Economic Times 17 12 2011