Cabinet approves hiving off BSNL’s mobile tower assets into a separate company

The Union Cabinet has approved proposal for hiving off mobile tower assets of Bharat Sanchar Nigam Limited (BSNL) into a separate tower infrastructure company, fully owned by BSNL. Decision in this regard was taken in the Union Cabinet Meeting chaired by Prime Minister Narendra Modi in New Delhi.

Significance

The Cabinet approval authorizes BSNL to monetize its telecom tower infrastructure with formation of separate subsidiary company. Independent, dedicated tower company of BSNL with a focused approach will help to increase BSNL’s external tenancies and generate higher revenue for new company.

Tower Infrastructure Company

The tower infrastructure company owns passive infrastructure assets (tower structure, Diesel Generator sets, power interface unit, battery units, air-conditioning etc) and leases it to telecom service providers. It enables telecom companies to achieve economies of scale and reduce capital investment costs for providing mobile services. It helps them to minimize duplication of investments and economize on costs of Operation and Maintenance (O&M), thereby improving profitability.

Background

There are around 4.42 lakh mobile towers in country out of which more than 66 thousand are of BSNL. The telecom tower industry has emerged as independent business to harness potential for sharing of infrastructure. The Department of Telecommunications (DoT) policy also allows sharing of passive infrastructure which has facilitated growth of the telecom infrastructure industry.

Month: Current Affairs - September, 2017