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BSNL To Hive-Off Tower Business: Report

State owned telecom operator BSNL, intends to hive off its telecom tower infrastructure into a separate company, and is floating a tender to appoint a consultant for the process, according to a PTI report(via The Times Of India).

According to BSNL Chairman & Managing Director, RK Upadhyay, the hiving off will allow optimum utilization.  The company has around 70,000 towers and it will explore various business models to leverage its tower infrastructure. Presently, BSNL  rents only around 1,500 towers, across India.

The move follows the recommendations made by the Sam Pitroda Committee for revamping BSNL’s business, as it witnesses increased losses.  The committee had recommended that BSNL should form a separate tower subsidiary, and lease out network infrastructure to other public and private sector customers and “unlock substantial potential value through strategic stake sale, mergers and acquisition or separate IPO (Initial Public Offer).” BSNL reported losses of Rs 8,851 crore during 2011-12.

Previously, BSNL was also rumored to have signed an agreement with Reliance Industries (RIL) subsidiary Infotel Broadband to share its 24,000 towers with the company for its upcoming 4G services. BSNL had also got an approval from India’s Department of Telecommunications (DoT) to surrender its own BWA(Broadband Wireless Access) spectrum, as it was given spectrum without the price being fixed in a number of circles, unlike other operators, which lead to the PSU paying more. However, the company will receive a refund only when the spectrum is put on auction.

In another interview with FirstPost, Upadhyay informed that the company is also looking to rent out 10 prime properties that it owns in cities like Mumbai, Hyderabad, Chennai, and Gurgaon. He had also talked about plans to lease out BSNL’s factories in Mumbai, Jabalpur, Richhai, Bhilai, Kolkata, Gopalpur (Kolkata) and Kharagpur, where  products such as SIM cards, optical fibre cable accessories, cellular and microwave towers, are manufactured,  to other manufacturers.

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