BSNL to hive off Rs 15,000 crore fibre assets into separate unit

Cash-strapped telecom player BSNL, which faced issues with salary payments last month, plans to hive off its fibre assets into a separate company, which is expected to have a valuation of Rs 10,000-15,000 crore.

BSNL has about eight lakh route km of fibre infrastructure across India compared with Reliance Jio with 4.78 lakh route km (including 178,000 route km that it acquired from Reliance Communications) and Airtel’s 2.46 lakh route km and Vodafone Idea’s 1.56 lakh km, according to estimates.

With content becoming the future for telecom industry, huge amount of fibre infrastructure will be required to match the rising data consumption.

BSNL has fibre network spread across the country. The plan is to share fibre assets or lease out to other telecom players as well as focus on its own fibre-to-the-home (FTTH) service to create additional stream of revenues, a senior official from BSNL told DNA Money on the condition of anonymity. A detailed plan will be worked out soon.

The new entrant Reliance Jio, Bharti Airtel and Vodafone Idea already have announced plans to hive off their fibre assets into separate entities.

For BSNL, there are two options once the hiving off is approved and implemented. The first is to lease out fibre to telecom players and other is to sell stake in order to monetise, which can only happen through government approval. “This will create an additional source of income. With mobile revenues on a constant decline due to intense competition and low tariffs, one needs to look out for other sources of income,” the official said.

Though the plan may take a year or two to actually see the light of the day, it may help BSNL in the long run as the going gets tough in standalone mobile business. The PSU boasts of a huge infrastructure, be it mobile, towers or fibre, but till now due to various issues it has not been able to monetise its assets on a large scale.

After many years, BSNL got the approval for separate tower unit but due to consolidation and exits in the telecom sector, the plan has been put on hold.

Last year, Jio had announced the launch of its broadband service Jio Giga Fiber across 1,100 cities.