BSNL to outsource O&M of 40,000 towers, cut expenses

Tower management and other networks account for about 25% of its expenditure.

State-run Bharat Sanchar Nigam Ltd (BSNL) plans to outsource operation and maintenance (O&M) of its 40,000 telecom towers across the country. The company has also begun leasing these to private telecom companies.

BSNL has proposed to set up tower operating centres (TOCs) at each of its circles, he company said in a tender inviting comments from interested parties till January 23. A TOC would have a centralised web-based monitoring system and the access would be with BSNL.

After staff costs, which account for 49 per cent of its expenditure, management of tower and other networks comes to about 20-25 per cent, according to a senior BSNL official.

Increased competition and dipping rates has taken a toll on the company, once among the top three in the mobile industry. For the first time since its inception, BSNL posted a loss of Rs 1,823 crore in financial year 2009-10 and about Rs 6,000 crore in 2010-11. Its revenue came down toRs 28,876 crore in 2010-11 fromRs 32,072 crore in 2009-10.

The contract for tower management will be given for a period of three years initially, with an option to extend it for another two years. Every circle will outsource O&M of its passive infrastructure at BTS sites. The bidder will be required to achieve energy cost reduction of at least 15 per cent with respect to the current average benchmark cost of energy, the draft said.

This will help BSNL in cutting expenditure, along with the voluntary retirement (VRS) proposal for about 100,000 employees. The VRS proposal is pending with the government and BSNL is seeking financial support of about Rs 12,000 crore to implement it.

A committee set up under Sam Pitroda, the Prime Minis-ter’s infrastructure advisor, to find ways to revive BSNL had suggested BSNL create a separate subsidiary for tower and all other related infrastructure to monetise the assets. So far, no decision has been taken on it.

Apart from leasing out towers, the company is also banking on enterprise business to generate revenues. In a recent interview with Business Standard, chairman and managing director R K Upadhyay had said it expected to get Rs 3,000 crore from this segment in the current financial year. Besides, it has launched a drive for all-round improvement in performance. Circle revenue is being monitored and the company is looking for at least a 15 per cent increase in revenue through various means in all the circles.