Loss-making Indian telco Bharat Sanchar Nigam (BSNL) is reportedly planning to create a subsidiary for its tower assets, and will then look to raise capital via a stake sale, M&A or IPO.
The state-owned company is calling for expressions of interest to…
Loss-making Indian telco Bharat Sanchar Nigam (BSNL) is reportedly planning to create a subsidiary for its tower assets, and will then look to raise capital via a stake sale, M&A or IPO.
The state-owned company is calling for expressions of interest to hire a consultant to advise on the matter, according to Minister of State for Communications and IT Killi Kruparani, cited in the Economic Times.
The creation of a towerco subsidiary has been on the cards for a while. Back in 2010, prime minister Manmohan Singh commissioned a review panel which suggested BSNL spin off its tower business.
“The committee recommended to create a separate subsidiary company for tower related infrastructure to aggressively market to other public and private sector customers and unlock the whole potential value through strategic stake sale, M&A or separate IPO,” said Kruparani in the Economic Times report.
BSNL’s financial profile is deteriorating and the company is in “dire need of cash”, an analyst familiar with the company told TelcomFinance today. “[The new subsidiary] may look for an external investor or go for a listing in the long term,” he suggested.
However, the analyst added that BSNL as a whole company was not currently listed and would not list in the near future due to its worsening profitability.
The telco is exploring other ways to improve its efficiency, such as tower-sharing. Last July it was reported that BSNL was considering sharing 24,000 of its towers with Reliance’s Infotel Broadband.
Kruparani did not respond to TelecomFinance in time for the deadline. BSNL was unavailable for comment.
