The Indian government has approved a proposal from state-owned operator BSNL to hive off its mobile tower business into a new unit to allow it to monetize its infrastructure.
The government has authorized a plan to establish an independent, dedicated tower company focused on increasing external tenancies to generate higher revenue, Livemintreported.
BSNL owns nearly 15% - 66,000 – of India's 442,000 telecoms towers. The tower industry is also becoming a big business in India with private operators already running separate tower companies.
The spin off process is expected to be completed in two years. According to the report, BSNL aims to increase its tenancy ratio from the current 1.14% to closer to the industry average of 1.9%.
Having the towers split off into a new unit will give BSNL greater flexibility to rent space on them and will reduce its liabilities from a license fee perspective, the report adds.
The move will also help BSNL adapt to the consolidation taking place in the Indian telecoms market driven by the intense pressure triggered by the entry of Reliance Jio Infocomm.