State-run transmission utility PowerGrid Corporation plans to unlock value of its transmission towers by leasing these assets to telecom companies interested in launching voice and data services in far flung and rural areas of the country.
Company sources told FE that the telecom tower operations of the transmission utility would be launched early next year after the government completes the process of spectrum auction to telecos.
As per the plan, PowerGrid would explore the option of rolling out this diversification plan either by floating a new entity or carrying out the operations under a joint venture route. Another option is to use its existing telecom brand PowerTel to lease out telecom towers to telecos who could install their Wimax antennas to offer voice and data services to customers in unconnected areas.
Not only towers would facilitate equipment support but it would also come hooked with optic fibre cabling to support networking and other broadband solutions.
?The telecom towers operations was put on hold for last couple of years due to problems in the telecom sector where we did not get requisite interest from players to use our infrastructure for their operations. We feel that sector will once again see a lot of activities next year and we will present to cash from this emerging opportunity,? an official in PowerGrid told FE asking not to be named.
It is expected that PowerGrid could get additional revenue to the tune of R100-120 crore from this leasing operation. Considering that PowerGrid has over 1,75,000 transmission towers with more than 70% of it in semi-urban and rural areas, the revenue potential from these is enormous.
Most of the business is expected from new telecom companies such as Videocon, Sistema, Telenor that are still to comply with rural obligation. ?Opportunities may even flow from existing companies for rolling out services such as 3G that need higher tower density and PowerGrid?s transmission network density would be helpful here,? said the PowerGrid official.
However, experts feel that existing tower companies already have spare capacities and for PowerGrid to get a share from their business would not be easy. ?Not all our transmission towers would be offered for lease to telecos. We will identify areas where there is lack of infrastructure and then issue tender.
Companies would appreciate that they could make huge savings if our network is shared with telecom companies,? said an official in the power ministry who deals with issues related to power transmission.
The cost of putting a cell tower varies between R25-35 lakh depending on the location. At present there are more than 3,50,000 cell towers in the country with ownership lying with few tower companies.
PowerGrid has over 22,000 km of optic fibre cable, which connects over 110 large cities and towns, including all the four metros More importantly, telcos will also want to partner with PowerGrid as the PSU holds the right of way in all key locations in the country. The telecom business is still small for PowerGrid as it accounted for less than 2% of its total revenue of about R13,000 crore in fiscal 2012-13.
