The Indian government has given the green light to a plan to spin off the telecoms towers assets of state-owned operator Bharat Sanchar Nigam Ltd (BSNL).
The cabinet approved the proposal in principle on Wednesday, the Economic Times reported, citing an unnamed source familiar with the situation.
The Department of Telecommunications (DoT) will set up a ministerial committee to calculate the market valuation of the new towers company and to set out its capital and organisational st ructure, the paper explained. The plan will then be sent back to the cabinet for consideration.
Separately, the government offered BSNL and sister company MTNL (Mahanagar Telephone Nigam Ltd) 6.27 billion rupees (€90 million) by way of compensation for surrendering CDMA spectrum.
The lion’s share – INR4.58 billion – will go to MTNL, which has ceded 1.25 MHz of spectrum in each of Delhi and Mumbai, while BSNL will receive INR1.69 billion for handing back one carrier of CDMA airwaves in four circles. The spectrum in question formed part of the auction held by the government in March.
Both proposals form part of the government’s drive to shore up the financial positions of the two state-owned operators.
According to the Economic Times, BSNL posted an unaudited net loss of INR72.65 billion (€1 billion) for the full year to March 2015, while MTNL’s loss came in at INR28.93 billion.
BSNL has also seen customer numbers slide in recent months, although MTNL has fared better.
BSNL served just over 61% of India’s 26.27 million fixed-line customers as of the end of May, down from 64.5% a year earlier, according to the latest figures from the Telecom Regulatory Authority of India (TRAI). Its fixed lines in service fell by over 2 million to 16.04 million.
MTNL’s market share rose to 13.5% from 12.5% over the same period, and it added a handful of customers, ending May with 3.54 million.
But in the mobile market both telcos are really struggling.
BSNL lost almost 14 million mobile customers during the year to the end of May, shrinking its market share to 7.96% from 10.07%. MTNL added 136,000, although its market share slipped to 0.36% from 0.37%.
There were 975.78 million mobile subscribers in India at the end of May.
