To address the issue of deficiency of telecom coverage in remote areas, the Central Electricity Regulatory Commission (CERC) has allowed state-owned power transmission firm Power Grid Corporation of India (PGCIL) to offer its electricity towers to telecom companies.
To address the issue of deficiency of telecom coverage in remote areas, the Central Electricity Regulatory Commission (CERC) has allowed state-owned power transmission firm Power Grid Corporation of India (PGCIL) to offer its electricity towers to telecom companies. If PGCIL’s initiative becomes successful, it can be emulated by private transmission companies and electricity distribution companies, the CERC said.
PGCIL will bear the capital expenditure on the infrastructure changes to add telecom set up (about Rs 20 lakh/location). The money will be recovered from telecom operators. Revenue from the business, after meeting costs, would be shared on a 50:50 basis with beneficiaries of the electricity transmission system.
As per estimates, annual revenue from this initiative is seen to range between Rs 68 crore and Rs 324 crore, subject to the number of towers leased out. Monthly rentals are expected to range between Rs 40,000 and Rs 50,000 per month, which is 12-18% lower than the average industry rates.
To feed power to the telecom system, PGCIL plans to use the electricity in its network, which otherwise gets wasted by going into the ground through earthing. A platform would be constructed on the transmission towers for mounting telecom antennas, base transceiver system and associated auxiliary power supply equipment. PGCIL, citing studies conducted by IIT Delhi, said extra high-voltage transmission lines would not impact mobile signals.
The power transmission behemoth may offer the service directly to telecom operators such as BSNL, Airtel, Vodafone Idea and Reliance Jio, or to telecom infrastructure players such as Indus and Bharti Infratel.
Currently, more than 4 lakh telecom towers are in use by various operators across the country. Telecom companies have been reluctant to add towers in remote areas due to large investment requirements towards land, installations and power supply connections. The step is seen reducing the carbon footprint of the telecom sector by decreasing the use of diesel generators.
Though PGCIL owns more than 2.5 lakh towers, about 12,700 towers can technically accommodate the telecom system. However, only about 6,000 towers can be used for this purpose as of now, as mobile operators are expected to find it financially viable to add antennas only in places where at least 3,500 people live nearby, KPMG said in a report.
PGCIL already owns and operates 47,735 km of telecom network, but the `196-crore revenue from this business comprised only 2.3% of its total income in Q3FY19.