NEW DELHI: State-run telecom companyBSNL has appointed KPMG India as a consultant to assist in hiving off its tower assets into a new company and facilitate leasing out the infrastructure to private firms.
BSNL managing director RK Upadhyay said that the agency was appointed a little over a week ago. "KPMG will advise BSNL on generating a separate revenue stream from the tower assets. It will offer us alternatives," he said. The consulting firm is likely to submit a report by July end, but has not been given any deadline.
BSNL has about 70,000 towers across the country and plans to hive off its physical infrastructure and land bank into separate offshoots. The exercise is aimed at reversing the fall in profits and revenues from its core telecom business by turning the idle assets to its advantage. The company is trying all options to revive its sinking fortunes as it faces one of its worse financial situations since 2004-05, the last time it reported healthy profits. The national carrier's losses have been widening since 2009-10.
In a presentation made to telecom minister Kapil Sibal last year, BSNL said it intends to earn Rs 1,600 crore in five years by hiving off its tower resources. The company said it expected to earn Rs 91 crore in 2013-14.
The telco's outgoing costs are far higher than the revenue it earns, and nearly half of the telco's earnings go towards employee salaries and other costs. ET reported earlier this week that BSNL is expected to report revenue of Rs 26,396 crore while its expenditure is likely to be more than Rs 34,590 crore, besides loans of Rs 4,264 crore.
It has embarked on several projects to regain financial health including leasing out its land bank for commercial development, utilisation of telecom factory infrastructure, connecting 1.5 million schools with broadband and setting up wifi hotspots across the country.
BSNL has a land bank of 4,400 hectares across the country which it plans to develop commercially and earn rental of Rs 250 crore annually from 2016-17. To begin with, project reports have been prepared for 10 properties for commercial use in Mumbai, Chennai, Hyderabad, Noida and Gurgaon.