BSNL to Lease Tower Infra No to Fiber Sharing, a good Move?

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After new government sets in, there are only good news for state-run telcos - BSNL & MTNL. In the latest development BSNL decides for leasing or sharing its telecom towers across the country. The revenue from tower sharing can boost its present weak financial status.

At present BSNL has around 73,000 towers of its own and a good number of them are in remote areas which will give good valuation. We can expect Reliance Jio, pan India based upcoming 4G operator in India, will definitely go for BSNL's towers as Jio tied up with several tower companies - Airtel, Reliance Communications, Viom, Ascend, Videocon Telecom, ATC.

BSNL also plans for leasing out its assets - lands and training centers to other agencies which would earn nearly ? 4200 crore in immediate to next 2 years future.

In June, 2014 BSNL has debt of ? 6448 cr while MTNL's stands at ?14760cr. In order to improve their economic health govt. of India plans for infusion of ? 39,458 cr to these loss making telcos.

To improve coverage & data speed and to compete against private operators BSNL add IP based 10,502 new Node Bs (for 3G) and 14,263 base transceiver stations (for 2G). While MTNL is going to add 1,080 Node-Bs and 800 BTSs in Delhi and 1,080 Node-Bs and 566 BTSs in Mumbai.

Minister of Communications and IT Ravi Shankar Prasad has asked the heads of two companies to improve their services as the Govt plans for revival. There will be a NOC (Network Operations Center) in Sanchar Bhawan to monitor both the companies' performance.

BSNL & MTNL showed poor performance mostly due to rise of private mobile & broadband operators, loss of landline subscribers, poor mobile services compared to private players, spending huge amount on employees' salary & retirement schemes. All it takes on their balance sheet. With all these measurements from inside & outside the two companies believe to be profitable in next 5 years with upgraded infrastructure for landline, mobile & broadband network.

With govt's separate planning for BSNL & MTNL, it is now obvious that merger of these companies is not coming soon.

Interestingly BSNL is yet to lease or share its countrywide fiber (specifically dark fiber) or copper lines to other agencies. In a recent media report government's ambitious ? 30,000 cr e-services broadband project, run by Bharat Broadband Networks (BBNL), to connect the rural India was looking for BSNL's unused fibre resources and BSNL responded negative citing reason that in coming days the utilized resources will be used for booming data demand in the market.

In the broadband market, BSNL is still the leader, thanks to their landline + broadband combo offering, but is facing severe competition from regional players like Beam in Hyderabad & Alliance in Kolkata. In the mobile market apart from Southern circles, BSNL mobile is just a nightmare for the users.

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