NEW DELHI: The Union Cabinet on Tuesday approved the communications ministry’s proposal to hive off about 66,000 mobile towers of Bharat Sanchar Nigam Limited (BSNL) into a separate company.
According to the Cabinet meeting, chaired by Prime Minister Narendra Modi, the new tower company will become a subsidiary of BSNL and also generate revenue for the parent company.
There are around 4,42,000 mobile towers in the country out of which more than 66,000 mobile tower are of BSNL. An independent, dedicated tower company of BSNL with a focused approach will lead to increasing of external tenancies and consequentially higher revenue for the new company, Communications Minister Manoj Sinha said. About 1,600 BSNL employees will go on deputation to the new company, Sinha added.
Sinha is also confident that the tower occupancy of BSNL, which is less than the private tower companies, will go up. The current occupancy rate of BSNL towers is 1.14, while the private sector has close to 1.97.
He also pointed out that the Department of Telecommunications (DoT) policy allows sharing of passive infrastructure, which includes the tower structure, diesel generator sets, battery units, power interface unit, and air-conditioning.
Besides the captive model in BSNL and MTNL where the service provider owns their passive infrastructure also, there are three different business models within the telecom tower industry.
Companies created by hiving off the tower assets portfolios of service providers into subsidiaries, those set up as independent joint venture entities by service providers jointly, and companies promoted by specific service providers but established as independent entities with the promoter being the anchor tenant for the tower company.
Tower infra company
It essentially owns the passive infrastructure asset and leases it to telecom service providers enabling them to minimise duplication of investments and economise on costs of operation and maintenance.
