Summary
Although The BSNL (Bharat Sanchar Nigam Limited) a Company is only 9 years old (came into existence w.e.f. October 1, 2000 only) but its' massive Telecom Service Infrastructure available through length and wreath of India is more than 135 years old.
Actually before October 1, 2000 it was DoT,Govt. of India looking out all Administration, Control, Regulation and Service Section of Telecom. Government chalked out the Service Section and made BSNL Company, regulation by TRAI and rest with DoT.
Analysis
The Telecom Service Passive Infrastructure specially Towers and Antennas requires very heavy capital requirements and the scare land. India 2nd largest populated country in the glove is mainly divided between Urban and Rural Areas. The Urban Areas comprises of massive metro cities like Mumbai, Delhi etc. population say more than 1.2 million and may be more than 12 million, while rural areas a small village may be of population say 1000. The urban areas are the source of revenue generation for Telecom service, but from rural areas revenue is very little, while for the Telecom Service passive infrastructure capital expenditure requirement is reverse, because of densely populated urban areas less no. of Towers (less distance and area) while for rural areas more towers as population or users are spread over a wide area thinly populated.
For any new entrant like Aircell, having or erecting towers through length and wreath of India a massive time consuming as well as very heavy Capital is required. It may also very difficult to find suitable place or land in urban areas, the cost of land in urban areas is also exorbitantly high, finding land or place in rural areas is not difficult and cost is also very low.
BSNL (earlier DoT, Govt. of India) is 2nd largest land and building owner in India. It owns massive area land in whole of the country almost each and every place acquired in last 140 years. BSNL owns and stalled massive Towers in whole length and wreath of India.
Earlier Government or DoT's or the senior officers of DoT/BSNL/MTNL, The Indian Telecom Service (ITS) officers were very pessimistic, 'NO Share" of infrastructure, every operator has erect his own towers, but now sharing is allowed.
By sharing the towers, heavy savings on capital investment and savings in the scare land. For a new entrant his capital fund requirement will reduce but running cost i.e. rent for the infrastructure use will increase, while the owner i.e. BSNL' income will increase as it will start earning rent from the other user for its extra space on tower lying unused.
Hence sharing of Tower infrastructure is a win-win situation of each and every operators sharing.
Regards,
R. P. Bansal
Rajendra Bansal consults with leading institutions through GLG
Analyses are solely the work of the authors and have not been edited or endorsed by GLG.
