DoT calls for BSNL to hive off towers

12 Dec 2013

The Department of Telecommunications (DoT) has requested permission from the Cabinet to spin off the tower assets of state-owned telco Bharat Sanchar Nigam Ltd (BSNL) into a separate company, Hindu Business Line writes. The DoT argued that the establishment of a distinct entity to hold and manage the towers would allow the new company to ‘unlock the true potential of the tower business.’ BSNL has a portfolio of 61,622 towers, the second largest in India after Indus Towers – a joint venture of Bharti Airtel, Vodafone and Idea Cellular – which has around 120,000. The telco opened up its towers for sharing in 2010 but has had little success securing tenants and according to the DoT, BSNL represents just 1% of the market for tower tenancies. The watchdog went on to suggest an explanation for the failure of BSNL’s tower business: ‘There are several reasons for the low market share, which include lack of focussed marketing mechanism for customer acquisition, the perception that BSNL towers have a lower site uptime, pricing of infrastructure being more expensive than prevailing market rate, the perception of conflict of interest between BSNL and non-BSNL tenancies and perception of poor response to tenant complaints.’