Bharat Sanchar Nigam Ltd (BSNL) is planning to take the franchise route to offer 4G LTE services across 14 circles in the country. The telco has reportedly invited bids from private companies to roll out 4G services across these circles on a non-exclusive revenue-sharing franchise model.
According to a Financial Express report, BSNL has categorised the 14 telecom circles, where it has spectrum to offer 4G services, into six zones, and each prospective bidder can bid for each of the six zones on the amount of revenue share they can offer.
The report said that a winning bidder will only be allowed to provide services only in maximum three zones. BSNL has set June 28 as the deadline for receiving bids from prospective bidders.
The telco has 20Mhz of spectrum in the 2.5 Ghz band in these circles. It is providing WiMAX services in these places.
“The minimum quoted percentage of revenue share to BSNL (in a zone) shall be 50%. However, bidder may quote more percentage of revenue share to BSNL in their financial bid for a Zone,” BSNL said in its tender document, reviewed by FE.
The revenue-sharing franchise model will help to reduce capex and increase subscribers, the report said, adding that companies have already shown interest in rolling out 4G services on behalf of BSNL.
In January, the company demonstrated speed of 35 Mbps during the soft launch in Chandigarh. BSNL will be the latest entrant in the 4G space, which has seen in action recently with the top mobile operators commencing services in various circles.
Currently, all the three incumbent telcos Airtel, Vodafone India, and Idea Cellular are offering commercial 4G services in the country, while Mukesh Ambani-owned Reliance Jio is offering services under the trial launch with over 7 lakh customers across the country. Besides, players like Aircel, Tikona and Telenor are also offering limited 4G services in their respective telecom circles.
BSNL's move to jump into the 4G space coincides with the telco's startegy to become profitable by 2020. It had a operating profit of R672 crore during the last fiscal through March 2015, while its revenue grew 4.16% to R28.645 crore.