DoT may lease out fibre-based network of BSNL
The Department of Telecommunications (DoT) is planning to lease out Bharat Sanchar Nigam’s (BSNL) fibre-based network spread over 8 lakh route km
The proposal submitted to the minister of state for communications Sanjay Shamrao Dhotre, seen by ET, suggested “sale and leaseback model” for funding capital expenditure (capex) and operational expenses. “InvITs is one way to do this transaction. Direct sales and full or partial lease back from infrastructure fund, which can pool fibre assets from other companies also as well as from BharatNet, can be another way,” the proposal read.
According to a person familiar with the matter, DoT is contemplating to open up dark fibre, owned and operated by BSNL, which could meet working capital needs as well as fund the voluntary retirement scheme (VRS)
- The proposal will bring in healthy cash flows to meet the state-run telco’s capital and operational expenses.
- The VRS scheme for employees attaining 50 years of age would require as much as Rs 6,500 crore. BSNL has so far not received Rs 3,300 crore worth of credit from the government.
- The department is also expected to engage in exploratory discussions with the London and New York-based fund managers, according to the person aware of the matter.
- This comes at a time when private sector rivals such as Vodafone Idea and Bharti Airtel are said to be analysing and converting their proposed combined optic fibre network entity into an InvIT to reduce debt and free up cash.
- Mukesh Ambani-owned Reliance Jio’s similar efforts through an IvIT structure to monetise its pan I-India optic fibre assets to deleverage its balance sheet.
BSNL is looking to shed some financial burden
The BSNL Board is also working on to finalise contours to lease out fibre assets, and that according to telco’s top official, would be a focus area that would lessen additional financial burden incurred to support huge fibre network.
With the monetisation of fibre assets, the public-owned telco can earn up to Rs 30,000 crore annually from “dormant” assets, Telecom Equipment Promotion Council vice-chairman Sandeep Aggarwal told ET.