Mounting losses and a stagnant revenue base have forced the state-owned telecom operator BSNL to monetise its land bank to mop up revenue. The company hopes to raise around R500 crore annually through this route.
Officials said that the company?s new business division is busy carving out the blueprint of setting up ICT parks in about eight of its prime land bank. BSNL itself would not invest in constructing any real estate on the land. Instead it would lease the land to developers to develop the parks.
?Once the offices are built, the office space in these parks will be leased out to companies who would also be BSNL?s captive customers for their communications needs ranging from landline connections, to broadband and wireless connectivity,? a senior company official told FE.
This is not the first time that the company has tried to explore new routes to boost its sagging revenues. Nor is the idea of utilising its rich land bank to generate additional revenue is new. In the past the company had announced plans to put the area in and around telephone exchanges to generate extra revenue. In fact even its counterpart in Delhi and Mumbai, MTNL has in the past toyed with the idea of generating income by utilising its prime real estate in the metros by giving them out on rent but nothing concrete has materialised till date.
BSNL has even tried franchising its 3G services in its bid to cut costs and improve the profit margins, but unrealistic conditions in its bid documents ensured that no bidders came forward.
Nevertheless, the company still plans to leverage on what is the largest land bank among all public sector enterprises with properties spread over some 3,500 towns.
Though industry analysts don?t appear too impressed with this idea, especially since it entails focusing on non-operational areas, it is the company?s inability to generate profitable figures from core areas which has compelled it to venture into real estate.
While its revenue has remained more or less stagnant in the last few years, the company?s profit margins have been falling and the once highly profitable company has been registering losses for for the last two years. For the year ending March 2012, BSNL is expected to post losses of close to R7,000 crore. Meanwhile its revenue is expected to hover around R29,000 crore. Its business is broadly divided into landline, mobile, broadband and enterprise services.
Last year the company had posted losses of R6,300 crore on a revenue base of R29,600 crore.