?BSNL to spend 25% of capex this year on its 3G services?

Bharat Sanchar Nigam Limited (BSNL), which has CDMA as well as GSM operations, is gearing up with its offerings and coverage for providing 3G services in India. The company currently occupies around 16% market share in the Indian telecom market which it is planning to increase gradually in the coming years. Kuldeep Goyal, CMD, BSNL spoke to Nikita Upadhyay about the company?s progress on 3G and Wimax business and its aim on tower monetisation.

How is the company planning to use few months before 3G auctions to attract high subscriber base?

We being the first company to go 3G did had some initial hiccups. But we have overcome that.

Earlier, BSNL had only three 3G services namely internet, video calling and mobile TV. In order to popularise our 3G services, we have planned to introduce four new services to this category which includes video streaming, downloading movie clips, multiplayer videogames and full streaming music download.

We have also rationalised and reduced tariffs and are gearing up with our 3G network.

When is the BSNL IPO likely to materialise? What are the valuations that you are looking at?

Talks are on in the ministry. Possibly by this year end we will have some clarity on it. We had earlier suggested for a 10% dilution of stake. We still have to evaluate the options.

How much is the company planning as capex for this financial year?

A total capex of approximately Rs14,000 crore is planned for the current year. Out of this around 25% will be spending on rolling out our 3G networks.

Please throw some more light on progress on 3G front.

Around Rs 2,700 crore has been envisaged for the roll out of 3G services during the first Phase in all the four zones. The expected expenditure during this financial year will be approximately Rs 1,700 crore and rest of the expenditure will be incurred in the next financial year.

Around 155 cities have got full coverage of 3G services and we are likely to cover 760 cities by the end of this financial year. At present, we have 54,212 3G connections and due to our initiatives we are expecting about 1.5 lakh 3G connections during this financial year.

What are the developments going on the tower business?

We have more than 42,000 towers in its network with wide coverage in rural and remote areas. We are keen to share this infrastructure with other telecom service providers so as to help in overall development of the telecom network and also monetise these assets.

We have formed a separate division within the company for the same and are actively in dialogue with various telecom service providers for sharing this infrastructure and the backhaul transmission media associated with the same.

What is the progress of the company?s Wi-Max rollout?

We have decided to provide broadband connectivity in all our wireline telephone exchanges (approx 30,000) and also on the wireless through various technologies such as GSM, CDMA and Wi-Max. We are in the process of installing 1,000 Wi-Max base stations which are expected to be completed by the year end. BSNL is also in the process for procurement of almost 7,000 Wi-Max base stations for coverage of the remaining blocks of the country. It is expected that this roll out also should be completed by March 2010. We have already placed equipment order for installing Wi-Max services for the states of Kerala and Punjab and roll out for the same is likely to be completed by March, 2010. BSNL has already rolled out Wi-Max services in certain parts of Gujarat , Maharashtra and Andhra Pradesh on revenue share model and is likely to replicate the same model in the remaining states.

Due to the churn in the landline, how has your broadband business been impacted?

At present, we have approximately 4.14 million broadband connections and have market share of 59%. The number is expected to increase to 6.5 million by the end of FY10. BSNL has 4,200 connections of 8 mbps and rests are of 2 mbps. We have envisaged approximately Rs 5,500 crore for broadband expansion. So far we have spent Rs 1,000 crore and approximately Rs1,500 crores each year will be spent up to 2011 to increase the broadband penetration in the country which is currently a huge opportunity.

Is BSNL in talks with AT&T for stake sale? What are company?s expansion plans outside India ?

At our end, we have no such information. BSNL is exploring opportunities for expanding its network outside India, especially in African continent. For this, BSNL is considering participation in new licences in various countries and also for acquiring stakes in the existing operations.