Lok Sabha Question No. 1811 (UNSTARRED), answered on 2019-02-13
Subject: BSNL Tower Corporation Limited
Ministry: COMMUNICATIONS
Asked by: ANTO  ANTONY

## GOVERNMENT OF INDIA MINISTRY OF COMMUNICATIONS DEPARTMENT OF TELECOMMUNICATIONS

## LOK  SABHA UNSTARRED QUESTION NO.1811 TO BE ANSWERED ON 13 TH  FEBRUARY, 2019

## BSNL TOWER CORPORATION LIMITED

1811. SHRI ANTO ANTONY:

Will the Minister of COMMUNICATIONS be pleased to state:

- (a) whether  it  is  a  fact  that  the  Government  has  recently  constituted  a  new  tower company named, BSNL Tower Corporation Limited (BTCL);
- (b) if so, the details of BTCL including its objectives and salient features;
- (c) whether  the  Government  has  any  record  regarding  the  number  of  mobile  towers owned by the BTCL;
- (d) if so, the details thereof, State-wise;
- (e) whether  it  is  a  fact  that  the  formation  of  BTCL  has  caused  a  steep  decline  in  the revenue of BSNL; and
- (f) if so, the details thereof and the steps being taken by the Government to enhance the revenues of BSNL?

## ANSWER

## THE MINISTER OF STATE (IC) OF THE MINISTRY OF COMMUNICATIONS & MINISTER OF STATE IN THE MINISTRY OF RAILWAYS (SHRI MANOJ SINHA)

- (a) & (b) A  new  tower  company  named  BSNL  Tower  Corporation  Limited  (BTCL),  a subsidiary  company  fully  owned  by  Bharat  Sanchar  Nigam  Limited  (BSNL),  has  been incorporated on 04.01.2018.  Its objectives and salient features are at Annexure.
- (c) to (f) BSNL has not yet transferred the business of mobile towers to BTCL.

## Objectivesof BSNL Tower Corporation Limited (BTCL):

The  telecom  tower  industry  has  emerged  as  an  independent  business  to  harness  the potential for sharing of infrastructure. A tower infrastructure company essentially owns the passive infrastructure asset and leases it to telecom service providers enabling them to minimize duplication of investments and economize on costs of operation and maintenance (O&M), thereby improving profitability.

## Key benefit of hiving off BSNL tower assets to a new Tower Company

-  BSNL will have an option to monetize the tower business resulting in a large cash inflow to BSNL
-  Saving in License Fee (@8% of tower tenancy revenue).
-  An independent, dedicated tower company of BSNL with a focused approach will lead to increasing  of  external  tenancies  and  consequentially  higher  revenue  for  the  new company.
-  The focus of Government on digitalization through Digital India Program and commercial launch  of  new  products/services  by  TSPs,  may  improve  the  tenancy  ratio  (number  of telecom operators who have put up their antennae and other active infrastructure on the towers) to the projection of 1.40 in FY 2020-21.  This is largely driven by higher usage of data and need to launch new products/services by Telecom Service Providers (TSPs).

## Main features of Cabinet approval dated 12.09.2017

-  Hiving off the existing and future telecom tower infrastructure of BSNL into a separate subsidiary company which will be fully owned by BSNL.
-  Capital Structure of the New Tower Company with debt of Rs 2078 Cr (FY 2016-17), share  capital  of  Rs  1564  Cr,  reserves  and  surplus  at  Rs  3230  Cr,  with  total  shareholders equity of Rs 4794 Cr and Debt/Equity Ratio of 0.43.
-  The book value to be the basis for transfer of assets to the New Tower Company.
-  In  the  New  Tower  Company  staff  strength  would  initially  be  a  maximum  of  1600 employees. However, the staff strength of the Tower Company may need to eventually increase  in  the  same  ratio  as  more  number  of  towers  are  added  by  the  New  Tower Company.
-  The provisions for pension contribution and pension liability for the three categories of staff  transferred from BSNL to the New Tower Company which will be fully owned by BSNL  would  have  to  be  on  the  same  terms  as  currently  applicable  and  as  per recommendations of Inter Ministerial Group (IMG).
-  The New Tower Company to setup a Joint Venture Company with a partner, preferably within  two  years,  on  achieving  financial  health  and  stability  with  the  objective  of monetization of its assets.

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