Concerned over deteriorating financial health and competitiveness of State-run telecom firm BSNL, the government has constituted a high-level committee, headed by Sam Pitroda and Deepak Parekh as member, to look into the issues and give recommendations within a month.

This was decided at a meeting chaired by Prime Minister Manmohan Singh last week to review the performance of two telecom PSUs — BSNL and MTNL.

“There was an agreement that the situation of BSNL required immediate action to address both the short as well as long term issues affecting its financial health and competitiveness,” the Prime Minster’s Office (PMO) said here.

On the position of another PSU — MTNL (that offers services only in two metros of Delhi and Mumbai) — was comparatively better and the issues concerning it be considered in the normal course, separately, it added.

The committee, headed by Mr. Pitroda, Adviser to PM on Public Information Infrastructure and Innovation, would also look into BSNL’s ongoing Rs. 35,000 crore GSM expansion tender.

The tender has been marred by controversies and is in limbo since last more than a year and the PSU have not been able to place the order affecting its market share in the fastest growing mobile telephony.

“It was felt that the approach to be followed for addressing the issues concerning BSNL required assessment and inputs of experts,” the PMO said, adding the committee would have Deepak Parikh, a noted banker, and Telecom Secretary P. J. Thomas as other members and they have been asked to give recommendations within a month.

BSNL’s revenues dipped by about 12 per cent in 2008-09 to over Rs. 33,000 crore but its market share especially in the mobile telephony took much bigger hit as it came down to fifth place from the third in last four years.

According to PMO, the issue of BSNL’s GSM phase-VI tender (to add 93 million lines) was also briefly discussed and it was agreed that the committee under Mr. Pitroda may look into it in its totality and suitably advise the Department of Telecom.

Sources also said that the meeting also considered disinvestment in BSNL at the earliest in order to improve its working to match the private sector.

This, however, is being opposed by the employees unions and the Telecom Minister A. Raja has various rounds of negotiations with them to move forward on this.