BSNL to spend $4.7 bln in 2008/09

NEW DELHI (Reuters) - India's largest telecoms firm, state-owned Bharat Sanchar Nigam Ltd (BSNL), will step up spending by a third to $4.7 billion in the financial year that begins in April, a minister said on Thursday.

BSNL, which had nearly 70 million subscribers at end-January, has been slow to grab opportunities than nimble-footed private sector player like Bharti Airtel that has 60 million subscribers.

India is the world's fastest growing market for wireless services, but BSNL that spans across the country has only about 38 million mobile users, well below top mobile operator Bharti's 57.4 million and Reliance Communications Ltd's 42.6 million and unlisted Vodafone Essar's 41.1 million.

BSNL's estimated total capital outlay for 2008/09 will rise to 185.91 billion rupees ($4.7 billion) from 140.65 billion rupees in 2007/08, junior telecoms minister Shakeel Ahmad told parliament.

He ruled out a stake sale to raise funds for the telecoms firm.

Last month, the government had said it was considering an initial public offering that could raise as much as $10 billion, but the proposal was opposed by the communist allies of the government.

BSNL, which provides fixed-line and mobile services across much of India, has been facing an uphill task in new subscriber signings due to inadequate infrastructure.

Last September, it awarded an order worth $1.3 billion to Ericsson to supply 13.1 million mobile lines, but this came after truncating planned expenditure.

In 2006, BSNL had called for bids to supply 45.5 million GSM wireless lines, but the tender size was later reduced to 23 million lines after the government asked it to renegotiate for a lower price.