MTNL, private telcos to share towers

Mahanagar Telephone Nigam Ltd plans to share its passive infrastructure, including towers, with private service providers as part of its efforts to boost revenue and put the state-owned company back in black in two years.

MTNL, which offers services in Delhi and Mumbai, has about 1,400 towers and plans to add 700 more this financial year. It had reported a loss of around Rs 2,800 crore (Rs 28 billion) for 2010-11.

A senior company official told Business Standard that MTNL had invited expression of interest (EoI) for sharing of base transceiver stations (BTS) and other passive infrastructure in Delhi. Subsequently, an EoI for sharing of BTS sites in Mumbai would be called, he said.

BTS are mainly installed over towers. But sometimes, these are also installed indoor. Majority of MTNL's BTS sites are at its own exchange sites.

The company had earlier shared some of its BTS sites with other service providers on an experimental basis. Following its success, MTNL has planned to extend it to both the circles it operates in, according to the official.

The development comes close on the heels of another state-run telecom company, BSNL's, plan to hive off its tower business to a separate subsidiary to unlock value. BSNL, which provides services across the country except Delhi and Mumbai, has 40,000 towers. It has also started discussions with private players to lease out its towers.

Amid declining revenues and market share in a cut-throat competition, both telecom players are trying hard to generate additional revenues, and leasing out towers to private service providers is one such step.

For 2009-10, BSNL posted a loss of Rs 1,823 crore (Rs 18.23 billion), the first time since its inception in 2000. It is expected to report about Rs 2,500 crore (Rs 25 billion) loss for 2010-11.

The leasing of towers is in the interest of these companies, as there are already many infrastructure providers, who will lease out towers to telecom companies, if not MTNL and BSNL.

Most new telecom service providers are not looking to invest in towers, while incumbents such as Bharti Airtel and Vodafone-

Essar have spun off their tower businesses.