BSNL gets cabinet nod to hive off telecom tower biz

BSNL rural broadband

The union cabinet on Wednesday gave ‘in-principle’ approval to hive off tower assets of the state-run Bharat Sanchar Nigam (BSNL) into a separate company.

“Consequent to this approval, the Department of Telecom is authorised to constitute an inter-ministerial group (IMG) consisting of representatives of the Department of Public Enterprises, Department of Pension and Pensioners Welfare and Department of Economic Affairs or working out the capital structure and organisational structure of the new company, after market valuation of the tower assets holdings or consideration of the union cabinet,” the statement said.

The cabinet has given its approval to extend financial support of Rs 169.16 crore to BSNL and Rs 458.04 crore to Mahanagar Telephone Nigam (MTNL) totalling Rs 627.20 crore on surrender of 800 MHz carriers in a few of their circles.

Earlier, BSNL’s chairman-cum-managing director Anupam Shrivastava told IANS that the valuation of which could be in the region of Rs 20,000 crore ($3 billion).

The state-run enterprise currently has 75,000 towers of which it intends to shift some 65,000 to the new entity. It is the only company with towers in all the difficult and strategic areas like in northeast India, Jammu and Kashmir and Maoist affected belt.

“Initial estimation shows the valuation of the towers company will be anywhere around Rs 20,000 crore. It will work at an arms length with our core business. That means even BSNL will have to give rental to the towers company,” Shrivastava had said.

According to a Deloitte India report, India currently has around 400,000 telecom towers and the growth is expected at around three percent annually over the next four-five years to take the numbers to 511,000 by 2020. Indus Towers is the market leader with 31 percent share, followed by BSNL with 18.1 percent.

Image source: BSNL / Facebook