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Cabinet decides to revive BSNL, MTNL

Last year, the government had in principle approved BSNL’s plan to hive off its tower assets into a separate entity.

By: ENS Economic Bureau | New Delhi | Published: August 6, 2015 3:22:37 am

In an effort to revive the loss-making telecom PSUs BSNL and MTNL, the Union Cabinet on Wednesday approved certain financial incentives for them.

Accordingly, it gave its nod to BSNL to hive off its towers into a separate company, which would help it monetise it.

In addition, both PSUs will get refunds for surrendering part of their CDMA spectrum that was put up for auction this year in March. The compensation works out to Rs169.16 crore for BSNL and Rs 458.04 crore for MTNL. While the compensation for BSNL comes in lieu of surrendering one block of 1.25 MHz of CDMA spectrum in four circles, for MTNL it is for surrendering 5 MHz each in Delhi and Mumbai. BSNL has around 64,000 towers across the country valued at around R20,000 crore according to industry estimates.

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All the private telcos hived off their towers around 10 years ago.

Last year, the government had in principle approved BSNL’s plan to hive off its tower assets into a separate entity.

BSNL also plans to monetise its other passive infrastructure like factory, land assets and training centres. The monetisation of other related passive infra assets could help BSNL raise another Rs 10,000-15,000 crore, according to estimates.

So far it has leased around 5,471 towers to various private telecom companies earning a revenue of Rs 432.6 crore at the end of May this year.

BSNL has tower sharing agreements with most private players. As its towers are spread across the country, even in the remote areas, private telcos prefer to share BSNL’s infrastructure. Consequent to approval, the DoT can constitute an inter-ministerial group for working out capital and organisational structure of new company after market valuation of its tower assets is done, a source said. FE & PTI

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