The government on Wednesday approved proposal to hive off the tower business of Bharat Sanchar Nigam Ltd (BSNL) into a separate company, and provide Rs627.20 crore in financial compensation to it and Mahanagar Telephone Nigam Ltd (MTNL) for vacating 800 megahertz (MHz) of CDMA spectrum.
The Cabinet has approved financial support of Rs169.16 crore to MTNL and Rs458.04 crore to BSNL, sources in the government said. The government has earned about Rs4,000-crore revenue from the sale of 800 MHz spectrum across the country, they added.
BSNL has surrendered spectrum (one carrier of 1.25 MHz each) for 4 circles, and MTNL in Delhi and Mumbai (two carriers of 1.25 MHz each).
BSNL’s mobile tower assets consist of about 65,000 towers and more than 50,000 tower sites have optical fibre cable connectivity. The company expects valuation of its mobile tower company to be around Rs20,000 crore.
The decision will enable the public sector telecom major to lease them to private peers to set up additional sites. This would also help in reducing call drops.
The Cabinet could not take up the issue of spectrum sharing and trading on Wednesday due to legal issues raised by the law ministry, sources said.
While spectrum sharing will help telcos share unutilised spectrum with other service providers in the same circle, spectrum trading will allow them to trade unutilised spectrum. Spectrum trading can result in additional revenues for operators.
At present, the government allocates spectrum to telecom firms only through auction. Spectrum trading and sharing system would also help remove any possible monopoly and spectrum hoarding.
(With inputs from PTI)