The Department of Telecommunications (DoT) is leaving no stone unturned to help the loss-ridden State-run operator Bharat Sanchar Nigam ltd (BSNl) bounce back. The department is not only preparing to present company’s land monetization proposal in the next Group of Ministers (GoM) meeting, which would help it raise additional funds but has also started drafting a new business proposal to make it again a profit making company.
As earlier reported by The Pioneer in September 27 edition, DoT has completed drafting its proposal for monetization of land assets held by BSNl. The State-run operator holds assets worth thousands of crore in over 3,500 towns of the country out of which DoT plans to liquidate some parcels of land to generate additional funds for the company.
“As far as proposal of land monetization is concerned, DoT has sent the proposal to various ministries and now is waiting for their suggestions. Once the suggestions are received, DoT will formally table the proposal in the next GoM meeting for their approval,” said a source. Apart from this, DoT is also working on other avenues through which BSNl could benefit from. “The DoT has prepared proposals to separate company’s tower business into a new entity which would be the wholly owned subsidiary of BSNl,” add the source.
BSNl currently has 65,000 towers across the country and like other telecom operators, DoT plans to utilize this tower network for generating revenues though outsourcing towers to other operators on sharing basis. Explaining how it would help BSNl, the source said, “Priority of the new proposed tower company would be to utilise the existing network for generating more revenue through outsourcing. Currently the tower segment generates very little revenue for the company.”
BSNl, earlier had reported that it expects a revenue of nearly Rs 91 crore from the tower business in the next financial year. “Another reason behind creating a separate subsidy of BSNl is to help generate a steady flow of income for BSNl,” the source added. So much is being done to revive BSNl whose profit started declining from Rs 10,183 crore in FY 05 to a loss of Rs 8,850.70 crore in FY12.
Earlier, BSNl had floated a request for proposal (RFP) for appointment of consultant who work on creating a new entity comprising the tower segment of the state run operator. DoT is expected to finish drafting the plans soon and would then approach the GoM for their approval. Citing another reason behind creating a wholly owned subsidiary for BSNl, source said, “Currently tower firms are given infrastructure provider status which exempts them from paying any revenue share to the Government. While, BSNl including its tower segment, pays eight per cent of its annual revenue as licence fee to the Government.” Hence creating a new entity would not only help improve the flow of funds for BSNl but would also help the company save funds.