State-controlled Bharat Sanchar Nigam Limited (BSNL) is considering to lease out its vast fibre base in the absence of any monetary support from the Narendra Modi-led government, to further fund the voluntary retirement scheme (VRS), future spectrum buyouts as well as regularise capital expenses.
BSNL chairman Anupam Shrivastava, however, confirmed the move and without divulging further added that the entire exercise would take two to three months, and then the matter would be taken up for consideration by its Board members.
Of the four incumbents, BSNL has a largest and most lucrative fibre-based telecom network with nearly 7.5 lakh route kilometres of optic fibre cable (OFC) which according to industry estimation could fetch as much as Rs 50,000 crore.
Billionaire Mukesh Ambani-owned Reliance Jio has 3.25 lakh route kilometres OFC including 178,000 kilometres it acquired from Anil Ambani-driven Reliance Communications, Bharti Airtel has 2.50 lakh route kilometres and Vodafone Idea has only 1.60 lakh kilometres of fibre spread across the country.
Based on government advisory, the state-run company is currently doing internal assessment and audit to monetise fibre assets, according to a person privy to the matter.
The initiative aims to lease out dark or unused fibre to private players and use it only on a need basis so that it could itself fund Rs 6,500 crore towards proposed VRS, buy or renew airwaves due to the lack of administrative allocation, become a zero-debt company, and eventually turn out to be a profitable public-sector enterprise.
The cash-strapped service provider is partially handicapped due to nearly 70% of its revenue outgo towards meeting salary expenses of 1.76 lakh direct workforce.
BSNL has an industry-lowest debt of Rs 15,000 crore while Sunil Mittal-driven Bharti Airtel has the highest Rs 1.10 lakh crore worth of liabilities.
“Operators are not making money so they are unable to spend on telecom infrastructure,” Sandeep Aggarwal, co-chairman, Telecom Equipment and Services Export Promotion Council (TEPC) told ETT.
Delhi-based TEPC is a government-backed group for the promotion and export of telecom gear, and is headed by former telecom secretary Shyamal Ghosh.
Aggarwal further said that the extent of BSNL fibre is huge with a value of more than Rs 50,000 crores and it should sell its fibre assets and then lease back, thereby making the assets light.
Mumbai-based new entrant Jio has recently sold and leased back its optic fibre network following the demerger to reduce debt levels.
Such a kind of an arrangement, according to him, would pump in huge money and 8% or Rs 4,000 crore can be spent back on fibre with lesser dependency on maintaining the network.
“By using BSNL’s robust fibre-based network, private companies can easily go into rural areas for 4G expansion,” Aggarwal said.
On asking about the potential customers in the already-distressed sector, he said that many assets management companies worldwide might show enthusiasm since the state-run telco has “most valued” fibre assets.
“The telco would have enormous cash in hand so that it can easily meet expenses for VRS and even allocate some resources to better its customer service,” Aggarwal added.
The state-driven telco is expected to slightly narrow its loss to Rs 7,500 crore in FY 2019, from Rs 7,900 crore in FY 2018, with revenue coming down to nearly Rs 23,000 crore for the fiscal year ended March 2019, following intense sectoral rivalry and declining average revenue per user.
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