BSNL eyes tower outsourcing, fibre bandwidth auction as options to cut costs and boost revenue

12 Jan 2012

In a bid to turn around its current financial difficulties, state-owned Indian telco Bharat Sanchar Nigam Ltd (BSNL) is reportedly examining the options of cutting costs and boosting revenue by the outsourcing of its tower management coupled with the auctioning off of spare fibre-optic bandwidth. According to the Wall Street Journal, operating and maintaining its existing tower infrastructure – which comprises around 60,000 towers – accounts for the telco’s second-largest expense after staffing. BSNL is understood to have invited comments from prospective partners until 23 January, after which the operator is expected to publish a bid document for those companies interested in the potential tie-up. Citing BSNL’s chairman and managing director Rakesh Kumar Upadhyay, the report claims that the telco is planning to initially offer a three-year contract, with an option to extend for a further two years. In terms of the likely savings that will be generated by the move, Mr Upadhyay noted that until feedback from prospective bidders has been received, the company would be unable to calculate exact figures.

Alongside the tower outsourcing plans, separately Mr. Upadhyay is reported to have confirmed that BSNL is aiming to auction spare bandwidth on its fibre-optic infrastructure. It is claimed that such a sale could generate around USD134 million for the telco. Having identified the amount of bandwidth it will need for the next five years, and therefore the additional bandwidth that could be made available to other operators, the executive noted that his company plans to auction bandwidth in two parts: below one gigabit and above one gigabit.

India, Bharat Sanchar Nigam Limited (BSNL)