The Indian government has approved plans to carve out the mobile tower assets of Bharat Sanchar Nigam into a separate wholly-owned subsidiary.
The Union Cabinet approval will allow BSNL, the state-owned telecommunications company, based in New Delhi, to monetise its telecom tower assets with the formation of a new subsidiary.
BSNL will transfer more than 66,000 mobile towers, most of which are located in rural areas, to the new entity. The assets account for about 15 percent of the 442,000 mobile towers operating across the country.
“An independent, dedicated tower company of BSNL with a focused approach will lead to increasing of external tenancies and consequentially higher revenue for the new company,” the government said in a statement.
India’s telecom tower market has drawn interest from local and international private investors in recent years.
In March, Bharti Airtel, India’s largest telecom company, sold a 10.3 percent stake in Infratel, its telecom tower business, to a consortium of funds managed by KKR and Canada Pension Plan Investment Board for around $953 million, followed by a further $403 million stake sale in August to a group of global investors.
Infratel owns over 90,000 telecom towers, including over 38,000 of its own towers, with the balance coming from its stake in Indus Towers, the country’s largest telecom tower company. Vodafone India and Aditya Birla, two Indus Towers shareholders, are looking to exit their investments in the tower business, as they work on a merger to take over Bharti Airtel, the country’s largest player.