BSNL gets government nod to hive off towers into separate
NEW DELHI: In huge financial relief to state-run telecom companies, the Union Cabinet
has approved hiving off BSNL's tower assets into a separate company and offered Rs
627.20 crore as compensation to BSNL and its metro counterpart MTNL for surrendering
CDMA spectrum that was auctioned in March this year.
The Cabinet on Wednesday gave an 'in-principle' approval to hive off tower assets, a
person familiar with the development said. As a next step, the department of telecom will
constitute an inter-ministerial group for working out the capital and organisational structure
of the new company after arriving at market valuation of BSNL's tower assets. This will be
then considered by the Union Cabinet, the person added.
The Cabinet green signal to the proposals is set to alleviate financial situations of the two
PSUs that had posted massive losses in the previous financial year. BSNL's unaudited loss
for the year ended March 2015 stood at Rs 7,265 crore while MTNL posted a loss of Rs
BSNL, which operates across the country save Delhi and Mumbai, may well unlock an
estimated value of Rs 20,000 crore from around 64,500 towers, with more than 50,000
tower sites having optical fibre cable connectivity. This may increase after completion of the
next phase of expansion.
"Demerger of the tower business will help unlock the value," said Hemant Joshi, partner at
Deloitte Haskins & Sells.
"The demerged entity can improve tower tenancies by making available the towers to all
private sectors. This will also lead to better usage of national assets."
BSNL will be compensated Rs 169.16 crore for giving up one carrier of
CDMA airwaves in four circles which were auctioned this year, while
MTNL will get Rs 458.04 crore from giving up 1.25 Mhz each in Mumbai
The government has gained revenue of Rs 3,997.61 crore from the sale of the auctioned 800 Mhz spectrum for 20
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