BSNL seeks partnerships with pvt sector

State-run BSNL is seeking partnerships with private sector rivals to generate revenue and return to profitability in a couple of years.

To improve earnings and cut losses, BSNL has drawn up a strategy to use its underused network and forge agreements with private telecom players. This will also mean minimal capital expenditure, according to a senior BSNL executive.

An official of the department of telecommunications said, BSNL wanted to use its network, which is lying vacant at several places, optimally.

The latest partnership being planned is with direct-to-home firm Tata Sky to offer BSNL's broadband subscribers video-on-demand. BSNL is also in preliminary discussions with Hathway and Den Cable for similar arrangements. "This has the potential of giving us revenue of Rs 300-400 crore annually," Anupam Shrivastava, chairman and managing director, BSNL, told Business Standard.
 

Experts said the best way out for the loss-making government undertaking was to allow private players to use its nationwide infrastructure and network. Private operators need not set up infrastructure all over again in rural areas.

The company will mainly be investing in technology upgrades of its network and in more towers. It is also trying to come up with an attractive voluntary retirement scheme for employees.

BSNL is close to signing an agreement with Reliance Jio Infocomm, wherein the Mukesh Ambani company will use BSNL's network and infrastructure for voice services through intra-circle roaming arrangements. "We have done some testing with Reliance Jio. They will use our 2G and 3G networks to offer services to their customers and we are looking to offer 4G services to BSNL customers using their network," Shrivastava said.

BSNL is also in talks with Aircel, Airtel and Telenor for similar intra-circle roaming agreements. To share its network for intra-circle roaming, BSNL has fixed charges at 25 paise a minute for voice, 25 paise a megabyte for data and 5 paise per SMS for any telecom operator. Intra-circle roaming could potentially create a revenue stream of Rs 3,000 crore in three years, Shrivastava added.

BSNL will come out with expressions of interest next month for a revenue-sharing model to launch 4G services. The services will be launched by the end of this year through partnerships with private network equipment providers, in a deal estimated at about Rs 1,200 crore.

BSNL holds spectrum in the 2,500 MHz band in 14 circles, where it will launch 4G services. It has spectrum across India, except in Gujarat, Maharashtra, Andhra Pradesh, Karnataka, Tamil Nadu and Kolkata, and does not operate in Delhi and Mumbai, where MTNL operates.

Recently, the company announced a soft launch of 4G services from Chandigarh with speeds of up to 100 Mbps. The service in Chandigarh is available only to employees, while customers can visit the 4G centre to experience it. After a successful pilot, BSNL aims to get into partnerships with equipment providers.

"We will not incur any capital expenditure on launching 4G services. We will go for a revenue sharing model with private equipment players and they will install equipment required for 4G, while we will offer spectrum," Shrivastava said.

The focus is now on offering 4G services through Wi-Fi hotspots. "We have set up 620 hotspots, which will be increased to 2,500 by the end of this financial year. By end of the next financial year, we will take the number to 40,000 on a revenue share and capital expenditure model," he added.

For BSNL, mobile services contribute Rs 13,500 crore, out of which 10 per cent comes from the data segment. "Data is going to be focus for BSNL and this will enable the revival of the company," he said. "We earn Rs 7,500 crore from broadband services. Going forward, the company expects revenue from combined data and broadband services to at least double to Rs 15,000-16,000 crore in the next two-three years."

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NEWER AVENUES

• To improve earnings, BSNL plans to use its underused network and forge agreements with private players
   
• BSNL is planning a partnership with Tata Sky to offer video-on-demand to the former's broadband users
   
• BSNL will mainly invest in more towers and upgradation of its network
   
• It is also in talks with Aircel, Airtel and Telenor for intra-circle roaming agreements
   
• Intra-circle roaming could create a revenue stream of Rs 3,000 crore in 3 years