Tariff war would hit revenues: BSNL

NEW DELHI, INDIA: State-run telecom major Bharat Sanchar Nigam Ltd (BSNL) Wednesday said the low tariffs announced by the company following drastic cuts in rates by competitors, will hit its revenues.

"Of course, some hit on the revenue would be there," BSNL chairman and managing director Kuldeep Goyal told reporters here.

He, however, hoped that the expected volume growth would make up for any reduction in revenues.

Many telecom firms like Reliance Communications, Tata Teleservices, Mahanagar Telephone Nigam Ltd (MTNL) have slashed their tariffs, triggering a massive tariff war.

Last month, BSNL announced its per-second billing plan, which allows users to make local and long distance calls within the BSNL network at a rate of one paise per second.

BSNL also announced that its acquisition plans for Kuwait-based Zain Telecom has been put on hold.

BSNL and the other state-run operator, MTNL, were considering partnering the Delhi-based Vavasi group and its Malaysian partner, billionaire Syed Mokhtar al-Bukhary, for acquiring a 46 percent stake in Zain.

However, Goyal said his company was yet to receive any feedback from Vavasi.

"We have sought information from the Vavasi group about the company itself (Zain), which we have not received yet. It could be implied that the acquisition plan is on hold," he said.

Goyal added that the company may soon sign a pact with Swedish network switchgear maker Ericsson for GSM lines in northern and eastern regions.

BSNL has earmarked Rs.14,000 crore for the 2009-10 for its capital expenditure.

©IANS