BSNL plans to auction surplus spectrum (Source : Economic Times ; Dated- 10 Nov 2010).

KOLKATA : THE state-owned Bharat Sanchar Nigam (BSNL), which suffered a Rs 2,611-crore loss last fiscal, the first in the company’s history, has decided to auction surplus capacity on its long-distance network to private companies, as it attempts to open up new revenue streams.

The surplus bandwidth is likely to be auctioned in two lots of 2.5 GB and 10 GB, a senior company executive told ET. BSNL’s move to share its optical fire cable (OFC) network with private players is seen as an extension of its earlier decision to share its infrastructure with private players on a rent or lease basis. The PSU will soon seek government approvals for the auctions after identifying the surplus capacities and fixing a valuation for it.

Optic fibre cables carry long-distance traffic across different parts of the country. Even mobile calls are first transmitted wireless to the nearest tower to the consumer and then carried on OFC networks to the closest tower to that of the receiver. Demand for OFC bandwidth is set to rise substantially with the launch of 3G services, which will involve high speed internet and data hungry applications on the mobile.

“The modalities are being worked out and we will submit a detailed blueprint to the telecom department after doing a valuation of this bandwidth resource and getting a fix on where surplus capacities exist,” a BSNL director told ET.

BSNL will have to compete with private operators such as Bharti Airtel , Reliance Communications , Tata Communications , all of whom have extensive OFC networks in place across the country and share it with other operators for a fee. “The auction proceeds should help BSNL tide over its immediate financial crisis triggered by the huge losses last fiscal, but the company should ideally have gone for infrastructure sharing of its surplus OFC bandwidth much earlier. But it is a bold step that will unlock value for this financially stretched organisation,” said senior principal at Dua Consulting and former CMD of the erstwhile VSNL, BK Syngal.

Private players pitching for this BSNL resource will be able to use this bandwidth in circles where they do not have transmission links to establish customised closed user communication groups across their organisations, executives with the telco said. “Private operators will also have access to ready-made infrastructure since BSNL proposes to auction lit optic fibres, which unlike the dark fibre, already has the end-terminals in place,” added a BSNL executive .