It’s impossible to miss the vast tracts of land owned by telecom operator Bharat Sanchar Nigam Ltd (BSNL) in Mumbai’s western suburb of Borivali. In a city infamous for its congestion and general lack of space, state-owned BSNL’s wealth of property is the rarest of exceptions. Now, with the beleaguered telco fighting for its future, it is considering selling some of its landholdings. These include the barren 42.43-acre plot in Borivali, a 45-acre housing colony in Deonar, and a 3.5-acre plot in Juhu that boasts a guesthouse and a 12-storey residential building.
These three land parcels in Mumbai—arguably the most promising ones in BSNL’s portfolio—are among the 14 assets BSNL wants to monetise to raise Rs 20,000 crore (~$2.7 billion) in four years. This is a key element of the Rs 69,000-crore (~9.6 billion) plan the Union government approved last month for the revival of BSNL and its fellow public telco Mahanagar Telephone Nigam Ltd (MTNL).
The revival is an about-turn for the government, which considered shutting down the loss-making public sector enterprises as recently as 2019. According to sources, the Prime Minister’s Office shot off a letter to Telecom Secretary Anshu Prakash, asking about the possibility of shutting down the two companies and selling their assets.
That plan, however, changed as the government realised that India was hurtling towards a duopoly of Bharti Airtel and Reliance Jio, the only two telcos whose futures are guaranteed at the moment. Vodafone-Idea, the other major player, faces an uncertain future. Its mountain of debt—around Rs 1 lakh crore ($14 billion)—coupled with a recent Supreme Court directive to pay Rs 53,400 crore (7.4 billion) in licence-related dues have left it on life-support.
Vodafone-Idea’s potential demise, though, could make BSNL invaluable. Doubts linger over the ability of Airtel and Jio to service the 336 million-odd Vodafone-Idea customers left in the lurch. Already, consumers have complained about network congestion in India’s metros. While both companies could upgrade their networks to handle the deluge of new customers, BSNL could help ease the burden.
BSNL’s own closure would also create a massive void. It has 117 million mobile subscribers, 9.8 million fixed-line customers, and 8.51 million broadband users. In many remote and militancy-prone areas, it is either the only player or one of two players servicing customers.
In addition, many of its mobile subscribers are at the bottom of the socio-economic pyramid and are crucial to the government’s aims to further digital payments and financial inclusion. Access to these subscribers will also be crucial to the various startups looking to scale by going beyond tier-1 and tier-2 cities, targeting first-generation smartphone users.
The government seemingly understands these imperatives and is hoping to turn BSNL around. Its plan involves the merging of BSNL and MTNL, monetising their assets, restructuring debt by raising sovereign guarantee bonds, and rolling out a voluntary retirement scheme (VRS) to its bloated workforce of over 170,000 people.