India's BSNL Plans US$4.7 Billion Infrastructure Spend in 2008

India's state owned Bharat Sanchar Nigam Ltd (BSNL) will be allowed to increase its infrastructure spend by a third to reach US$4.7 billion in the next financial year - said a government minister.

BSNL's estimated total capital outlay for 2008-09 will rise to Rs 185.91 billion ($4.7 billion) from Rs 140.65 billion in 2007-08, junior telecoms minister Shakeel Ahmad told parliament. Local newspaper, The Economic Times also reported that he had ruled out selling a stake in the company to raise funds to pay for the expenditure.

The government had been considering a partial flotation of the company, but this was opposed by the Communist party, on which the ruling party depends for its majority in Parliament.

Last year, Ericsson signed a torturous deal with BSNL for just over 13 million GSM lines - worth US$1.3 billion. The deal was however mired in political arguments and was originally supposed to be worth three times as much.

Any bidders for the 2008 contracts can only hope that future tenders will proceed a lot more smoothly.

Posted to the site on 28th February 2008