State-owned Bharat Sanchar Nigam Ltd (BSNL) plans to float a subsidiary for IT application management and development of value-added services (VAS). It expects to tie-up with a large established private sector firm operating in IT management and VAS. It is willing to cede a minority stake to that company.
?This is at a very nascent stage of planning. We are looking at it and some concrete steps are expected to be taken in a few months,? Kuldeep Goyal, CMD, BSNL, told FE.
To create a robust business model for this subsidiary, BSNL will be allowed to allot contract to it without going through the tender process. This will help speed up its decision making capabilities and lead to better and on-time implementation of technological advancements.
The company floated two tenders for implementing ERP solutions and IT coil data recording (CDR) for Rs 400 crore and Rs 800 crore, respectively. These solutions will be implemented by the end of 2010-11.
The company has been also been planning to hive off its tower business. It plans to float a tower infrastructure company in six months to aggressively market its infrastructure to other private players and unlock substantial potential value through a strategic stake sale.
This will also be done to explore possibilities of monetising its tower assets and fiber optic capabilities. ?We have signed agreements with almost all major operators for sharing our towers. We are working on making a separate tower subsidiary,? said Goyal.
The company has more than 50,000 towers on a pan-India basis. It has already committed to share 8,000 towers, of which 500 are being shared by private incumbents and new entrants like Bharti Airtel, Vodafone, Idea Cellular, Shyam Sistema Teleservices (SSTL), among others.
In 2008-09, BSNL earned Rs 17 lakh from tower sharing. It targets leasing 11,000 more towers for revenues of about Rs 250 crore. The formation of these two subsidiaries is subject to examination which may also involve Department of Telecommunications and other departments.
BSNL currently has a subscriber base of about 97 million (28 milion wireline and 69 million wireless subscribers). It also has 5.3 million broadband subscribers and is about to launch Wi-Max services.
The company was a late entrant in the mobile segment because it got telecom license in 2000, whereas the private operators got it in the year 1994-1995. BSNL has been losing its market share in the wireless segment.
In May, the company added one million wireless subscribers which comprised 11.61% market share of the total additions.