BSNL to enter into roaming arrangements with private players

State-owned BSNL is set to invite bids from private operators to share its third generation airwaves, a company official told ET.

The telco is of the view that it can raise between Rs 2,500 crore to Rs 5,000 core over five years if it were to enter into roaming arrangements with two players for its third generation airwaves.

"Having tracked MTNL's success in attracting bids (for sharing its 3G airwaves by entering into roaming agreements, we are working to put in place a similar model," BSNL's acting chairman and managing director Gopal Das told ET.

BSNL has 3G airwaves in all circles except in Delhi and Mumbai. The telco had to shell out over Rs 10,000 crore for these airwaves, as it had to match the bids by private operators.

The 3G auctions, which took, place last year failed to throw up a pan-India licence holder. The country's top two mobile firms—Bharti Airtel and Reliance Communications (RCOM) —each won 13 of the 22 telecom zones on offer while other major operators Vodafone Essar, Idea Cellular and Tata won a total of nine, 11 and nine circles, respectively.

Analysts also say in a bid to retain their high-end users, all telcos are set to enter into roaming agreements with each other, a move that can enable them offer high-end data services even in those regions where they have not bagged 3G spectrum. This is not spectrum sharing, but a commercial pact where operators can offer its customers 3G services on another operators' platform.

For BSNL, which has failed to make any significant progress in attracting 3G customers, despite having a first mover advantage, the revenues from sharing 3G spectrum will help the company reduce its losses. BSNL saw its overall revenue fall from Rs 32,842.30 crore in 2007-08 to Rs 30,169.42 crore in 2008-09 and further to Rs 27,913.44 crore in 2009-10 and has reported revenues of Rs 13,823.96 crore for the first half of the current financial year (2010-11). BSNL's fall from grace is best explained from the fact that its annual revenues were over Rs 40,000 crore for the year-ended March '06.

ET had earlier reported that BSNL, which suffered from rampant political interference and neglect under former telecoms minister A Raja, had recently announced a loss of Rs 1,823 crore for the year to end-March , a first for the company since it was set up, while also adding that the actual losses are as high as Rs 5,955 crore during this period. The telco only managed to reduce its losses due to its Rs 4,132 crore income from non-telecom related activities.