State-owned Bharat Sanchar Nigam Ltd. has started the process of selling 10,000 telecom towers to meet the asset monetisation target set for it by the central government. The move is a part of the National Monetisation Pipeline (NMP) set up by the centre.
The enterprise value of the towers is pegged at around Rs 4000 Crore and KPMG has been selected as the financial consultant for the administration of the deal. The list of Potential buyers for the towers includes Brookfield-owned Data Infrastructure Trust and American Tower Corporation.
BSNL which has operations in 20 of India’s 22 telecom circles owns over 68,000 towers, 70% of which are fiberised and capable of supporting 4G and 5G services. Of these BSNL is scheduled to sell 13,567 towers which are co-located in areas where it has infrastructure sharing agreements with Jio and Airtel, in tranches till 2025. MTNL which has operations in Mumbai and Delhi circles is scheduled to monetise 1350 towers in a phased manner.
Earlier every telecom operator prefered to own and operate its towers, but now they prefer to operate in an asset-light model where they sell their captive towers to a third party company and lease them back and pay as per the contractual agreements. This has led to a consolidation in the mobile tower industry with companies like Brookfield and ATC enjoying a duopoly in the market.
The government has approved a relief package for BSNL and MTNL and is actively trying to revive the ailing PSUs. Relief measures included reducing the workforce by giving out VRS to eligible employees resulting in cost synergies by savings in payouts. The cabinet recently approved the merger of BBNL with BSNL to further strengthen the operator’s position in the market, giving it access to the latter’s pan India network of optic fiber.