The government is now considering alternative proposals to monetise the BSNL and MTNL tower business after not finding the current proposal lucrative enough.
In a recent meeting with the core group of secretaries on asset monetisation, the department of telecommunications (DoT) told the panel that it is not in favour of monetisation of BSNL and MTNL towers, people in the know said.
Currently, BSNL and MTNL towers are part of the government’s asset monetisation blueprint. BSNL has 68,000 towers and MTNL has 1,350 towers in Delhi & Mumbai.
The observation was made by DoT based on internal studies. “As per initial studies, monetisation of BSNL/MTNL tower assets does not appear to be value accretive. Propose to continue with existing tower sharing arrangements,” sources told CNBC-TV18.
The core group of secretaries on asset monetisation is headed by the Cabinet Secretary. The government is targeting to unlock optimal value from these public sector assets which have not yielded a potential return. Asset monetisation involves the creation of new sources of revenues by unlocking of the value of unutilized public assets.
After noting the observations made by DoT, the government is going back on the drawing board to chart a fresh strategy for monetisation of these assets.
The NITI Aayog has advised securitisation of existing tower rental revenues. For this, the Department of Economic Affairs under the Finance Ministry will share its comments on the rental model of BSNL /MTNL towers with DoT.
"Post the discussions between these two departments, the custodian ministry, that is the DoT will appraise the Prime Minister’s Office on tower rental model before finalizing the new scheme,” sources added.
This might mean a fresh proposal being moved for the consideration of the union cabinet.
With regards to the BharatNet OFC infra being structured in PPP mode for monetisation, the transaction structure is at an advanced stage and bidding will be announced shortly.