Union Cabinet on Tuesday authorized state run BSNL to hive off their mobile tower assets. This move will surely help BSNL to revive and generate revenue from these assets. For this, a newly formed independent subsidiary company will run these tower assets under BSNL governance.
“Private telecom service operator has created a separate tower subsidiary and have been offering their services. Today Cabinet has granted approval to Bharat Sanchar Nigam Limited also to harness the full potential of its mobile towers by creating a separate completely owned subsidiary,” said Manoj Sinha, Telecom Minister.
BSNL has about 70,000 mobile towers out of which 66,000 has been transferred to the new entity. The new tower company will now own roughly around 17 percent of the country’s 4.4 lakh towers. According to R K Upadhyay, this is a good thing for BSNL but it is a bit late. It is not clear whether BSNL will find as many suitors but will surely help them clean up the balance sheet. BSNL has towers located in areas which the new private players find difficult to acquire. Many of these companies will be looking for towers which suit 4G footprints.
The mobile towers fall under the category of passive infrastructure and DoT policy allows for sharing them. This policy has helped the growth of telecom industry infrastructure as a whole. The cabinet note for hiving off was floated back in 2015. It seems a bit late and it will take some time to get a buyer for the tower infrastructure worth 3.2 billion dollars. BSNL might be using the earned revenue to boost 4G VoLTE and 5G trials, which wasn’t possible until now due to their heavy debts.
Passive & Active Infrastructure Sharing
Passive infrastructure sharing means sharing of physical sites, buildings, shelters, towers/masts, power supply and battery backup, etc. Active Infrastructure sharing means sharing of active equipment such as antenna systems, cables, filters, node B, allocated frequency spectrum, transmission system etc by more than one operator.
Recently private players like Reliance Communications and Bharti Airtel sold their stakes in tower subsidiaries to clear the debts. According to Sinha, BSNL towers currently have a tenancy ratio of 1.14 which will improve after this move. This can also create plenty of job opportunities. About 1,614 people will go on deputation from BSNL and the department of telecom to work in the tower unit. This whole process might take up to two years. There is also a possibility of joint venture once the hiving off is over, if the financials allow. Hope you enjoyed the article, Peace!