BSNL to hive off mobile tower assets into separate company

However, BSNL may not be able to sell all of its towers as many of them are located atop the company’s telephone exchanges.

For instance, the tender for optical fibre communication (OFC)/ transmission augmentation project in North Eastern States was floated in early 2015, for which the cost obtained was intimidated to USOF in early 2016, but it raised some queries and finally the tender was cancelled by USOF in April this year. “A tender for equipment will be floated subsequently, and BSNL would complete the tender evaluation process in four months after the submission of bids”, a senior government official told BusinessLine.

The cabinet has authorised BSNL to monetise its telecom tower infrastructure with the formation of a separate subsidiary.

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The Cabinet on Tuesday approved hiving off about 66,500 mobile towers of state-run BSNL into a separate company with a view to monetising them by either listing the new entity or leasing the masts to private firms.

“An independent, dedicated tower company of BSNL with a focused approach will lead to increasing of external tenancies and consequentially higher revenue for the new company”, an official statement said.BSNL with a focused approach will lead to increasing of external tenancies and consequentially higher revenue for the new company”, an official statement said.

“Telecom tower industry is becoming a big business”.

The mobile tower industry has emerged as an independent business to harness the potential for sharing of infrastructure. Tenancy ratio was 1.14 was in the past. Average tenancy ratio of other service provider is 1.9.

“1,614 people will go on deputation from BSNL and the Department of Telecom”. The business model arose from the need to achieve economies of scale and to reduce capital investment costs for providing mobile services.

Airtel in March sold a 10.3% stake in Bharti Infratel to raise Rs6,200 crore and later in August, it sold an additional 3.65% stake to generate Rs2,570 crore.

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