Crossing frontier: BSNL seeks partnerships with private sector

IN A bid to generate revenue and return to profitability in a couple of years, state-run BSNL is seeking partnerships with private sector players. BSNL has outlined up a strategy to use its underused network and forge agreements with private telecom players. This will also mean minimal capital expenditure, says a senior BSNL executive. An official of the department...
of telecommunications was quoted as saying that 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 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, was quoted as telling a national financial daily.
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, where the 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.
Of late, BSNL 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. BSNL has 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, BSNL will take the number to 40,000 on a revenue share and capital expenditure model.
For BSNL, mobile services contribute Rs 13,500 crore, out of which 10 per cent comes from the data segment.