BSNL, MTNL accelerate the process of asset monetization, Telecom News, ET Telecom

BSNL, MTNL accelerate the process of asset monetization, Telecom News, ET Telecom

New Delhi: State-owned telcos Bharat Sanchar Nigam Ltd (BSNL) and Mahanagar Telephone Nigam Ltd (MTNL) have decided to give preference to government organizations, both in the states and the Centre, in selling their land holdings worth over Rs 1 lakh crore.

Only in cases where such organizations do not require the land assets will the properties be offered to private companies through auction, said an official with direct knowledge of the details.

“Sales to government organizations are clean and smooth and there are no unnecessary lawsuits,” the official added.

Recently, BSNL sold one of its properties in Lucknow to the Income Tax department for around Rs 229 crore, which was the market value of the building.

“Selling to government services does not mean that rates are subsidized. We determine the market value of the properties. It is just that the departments will get the properties without auction,” the official added.

So far, BSNL has raised Rs 1,600 crore through the sale of properties to both government departments and private entities. The company plans to raise Rs 20,000 crore in four to five years through land monetization.

Real estate consultants view monetization of BSNL and MTNL land and properties in key cities of India as a strategic opportunity in the current real estate market scenario.

According to experts from the real estate sector, the timing of the monetization fits in well with the recovery in the real estate market.

Post-pandemic, all major commercial and residential real estate markets including Mumbai, Bengaluru, Delhi and Hyderabad have witnessed a revival. Prime plots in these cities are witnessing increasing interest from developers and investors looking for strategic locations for new projects.

BSNL and MTNL properties are located in prime areas with significant commercial and residential potential. The strategic location of these properties adds significant value, making them highly sought after.

Recently, telecom secretary Neeraj Mittal had written a letter to all secretaries of the Centre's ministries and chief secretaries of state regarding the land holdings of both the telecom companies. BSNL has developed a dedicated website with a list of properties available for direct sale in different parts of the country.

“This would help government organizations requiring such properties benefit from the plan of direct sale of PSU to government organizations,” Mittal said in the letter.

However, the sale of land properties to the telecom PSUs was slow to take off. A few months ago, the government sidelined both companies due to the slow pace of land monetization. The two companies were asked to prepare a detailed list of land plots, in circles, with appropriate valuation according to current market rates.

Land monetization is a key area for reviving the ailing telecom companies. For its part, the government is doing everything it can to improve the activities of the loss-making telecom companies.

In 2019, a generation package worth around Rs 69,021 crore was provided to BSNL and MTNL, which brought down their operating costs. Another revival package worth around Rs 1.64 lakh crore by 2022 aimed at infusing fresh capital, restructuring debt and financing rural telephony viability.

As a result, BSNL and MTNL started making operational profits between 2020 and 2021.

Moreover, in June 2023, the Union Cabinet approved the allocation of 4G/5G spectrum to BSNL, with a total outlay of around Rs 89,047 crore through equity infusion.

  • Published on May 29, 2024 8:33 AM IST

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