The Indian government is taking significant steps to revitalize the struggling state-owned telecom operator, BSNL, by launching a monetization initiative for its valuable real estate assets. This strategic move comes as BSNL has recently reported a profit for the first time in over 15 years, signaling a potential turnaround for the beleaguered company. The National Land Monetisation Corporation (NLMC) is at the forefront of this effort, opening the door for property consultants to assess the value of BSNL’s prime land holdings.
Monetization of Prime Real Estate
According to official sources, the NLMC is currently seeking applications for the valuation of 35,591 square meters (approximately 8.7 acres) of BSNL’s freehold land spread across five key southern cities: Hyderabad, Bengaluru, Kozhikode, Ernakulam, and Mangalore. This initiative aims to tap into the potential of BSNL’s underutilized assets as the company looks to bolster its financial standing.
Recent Financial Gains
In an impressive turn of events, BSNL reported a profit of Rs 262 crore for the third quarter of 2024-25, marking its first profitable quarter since 2007. The Department of Telecommunications (DoT) has optimistic projections, anticipating that BSNL will achieve a profit of Rs 558 crore by FY27, driven largely by the rollout of 4G and 5G services. Estimates suggest BSNL’s revenues could soar to Rs 33,553 crore in FY27, reflecting a remarkable 73.5% increase from Rs 19,344 crore in FY24.
Engaging Property Consultants
The NLMC has reached out to a select group of international property consultants (IPCs) to submit their proposals for conducting market valuations of the prime land. Bids are due by May 7, and the chosen consultant will be required to deliver a valuation report within 45 days of the contract agreement. Some of the prominent IPCs eligible to participate include:
- SBI Capital Markets
- CBRE South Asia
- Ernst & Young LLP
- Cushman Wakefield India
- KPMG Assurance and Consulting Services LLP
- Deloitte Touche Tomatsu India LLP
- Colliers International (India) Property Services
- Anarock Property Consultants
- Jones Lang La Salle Property Consultant (India)
- Darashaw & Company
- RITES Limited
The Importance of Asset Monetization
This strategic monetization of non-core assets like land and buildings is expected to generate much-needed resources for BSNL. Historically, the firm has struggled financially, with its last annual profit recorded in 2008-09. Over the past 15 years, BSNL’s cumulative losses have exceeded Rs 1.3 lakh crore. However, recent efforts have shown promise, as BSNL managed to reduce its net loss for FY24 to Rs 5,367 crore, down from Rs 8,161 crore in FY23.
Government Support and Future Outlook
The government has invested a staggering Rs 3.2 lakh crore in BSNL through three revitalization packages, aiming to navigate the company back to stability. Experts attribute BSNL’s struggles to various factors, including delays in adopting modern technologies like 4G, employee inefficiency, poor customer service, and escalating operational costs.
The NLMC, established to facilitate the monetization of non-core assets from Central Public Sector Enterprises (CPSEs), is set to play a pivotal role in advising on the monetization of approximately 5,000 acres of land from a range of distressed CPSEs, which includes MTNL, BPCL, and others.
In an interesting development, the defense ministry is also considering engaging the NLMC to help monetize around 32,000 acres of land linked to military farms, abandoned airfields, and other properties. This broadens the scope of asset monetization beyond just BSNL, potentially transforming the financial landscape of several state-owned entities.
With these initiatives in motion, the future looks promising for BSNL as it embarks on a path to recovery and growth.
