At a time when private players continue to register profits and the Indian telecom sector remains a favourite among foreign investors for being highly lucrative, state-run PSU, BSNL appears to be losing the race at an alarming speed.

The firm announced its profits for fiscal year 2008-09 reporting a net of Rs 574.85 crore as compared to net of Rs 3,090 crore registered in last fiscal. However, revenues were up at Rs 35,811.92 crore in 2008-09 from Rs 32,359 crore last year.

BSNL attributed the drop on profits to increased employee cost on account of implementation of Sixth Pay Commission recommendations and also to the declining fixedline subscriber base.

The operator witnessed 90 % growth in revenues from broadband segment and also saw good uptake for its Leased Line services.

BSNL is banking on VAS as well as its enhanced offerings for the Enterprise segment to improve performance in the current fiscal. IT is also looking for opportunities in the infrastructure sharing space.