BSNL to buy internet bandwidth from Bangladesh govt firm

State-run telecom company Bharat Sanchar Nigam Limited (BSNL) will sign its first agreement outside India to buy bandwidth from Bangladesh Submarine Cable Company to provide internet services in the northeast. It is also exploring South Africa for expansion, and may pick up equity stakes in one of the country’s telecom service providers.

Bangladesh Submarine Cable Company has agreed to sell its unused bandwidth to BSNL for $1.2 million a year. Initially, BSNL will buy 10 Gbps (Gigabits per second) capacity, which will be increased to 40 Gbps over time.

The agreement between the two companies is likely to be signed during the visit of Prime Minister Narendra Modi to Dhaka that starts tomorrow, according to an official from the department of telecommunications.

BSNL provides bandwidth from West Bengal to the northeastern states. Once optical fibre cables are laid from Agartala and Dhaka, to be joined at the border, Internet users in the northeast will have faster speeds.

BSNL has sent one of its directors to South Africa to explore business opportunities. “BSNL has also written to government telecom operators of BRICS (Brazil, Russia, India, China and South Africa) nations expressing interest in their telecom market,” a BSNL executive told Business Standard.

“We could acquire equity stakes or enter into an agreement or participate in bids in the overseas market. The talks are preliminary but foraying overseas is part of our vision document for the current financial year,” the executive added.

“The focus is on increasing our topline in India through data services and foraying into telecom markets outside India to create additional streams of revenue. We are also eyeing consultancy projects in foreign markets,” he added.

BSNL was earlier in the race for Ethiopian Telecommunications, a state monopoly. In 2009-10, BSNL bid for Zambia’s lone fixed-line operator Zamtel and was also in the fray to buy Luxembourg-based Millicom’s Sri Lankan mobile network. None of the deals worked out because of issues over pricing and policy. “By early next year, we will be able to finalise our strategy for an overseas foray,” the official added.

Communications and information technology minister Ravi Shankar Prasad is keen to revive BSNL and MTNL. MTNL provides services in Delhi and Mumbai, and BSNL in the rest of India.

BSNL posted its first loss at over Rs 1,800 crore in 2009-10. It had a record profit of over Rs 10,000 crore in 2007-08. Last year, BSNL’s losses were around Rs 7,600 crore.

BSNL’s losses stem from depreciation of assets and administrative costs, which account for 55 per cent of its revenue.

BSNL’s Chairman and Managing Director Anupam Shrivastava in an earlier interview to Business Standard had said, “The losses have already started coming down. We expect BSNL’s books will be in shape by 2018-19. We plan to invest Rs 39,000 crore in the next five years and a major chunk will go towards data.”

Mobile services contribute Rs 13,500 crore to BSNL’s revenue, of which Rs 1,350 crore is from data. BSNL earns Rs 7,500 crore from broadband services. It expects revenue from data and broadband services to double to Rs 16,000 crore in three years.

FOREIGN DREAMS

IN BANGLADESH

• BSNL to buy bandwidth from Bangladesh Submarine Cable Company (BSCC) to improve services in India’s northeastern states
• BSCC agrees to sell unused bandwidth to BSNL for $1.2 million a year. Initially, BSNL to buy 10 Gbps (gigabits per second) capacity
• Project execution to take about six months once deal is signed during Prime Minister Narendra Modi’s visit starting Saturday

IN AFRICA

• BSNL sends one of its board directors to explore opportunities in South Africa. Eyes consultancy projects in foreign markets
• Focuses on increasing top line across India through data services and foraying into foreign telecom markets to create additional stream of revenues
• Years ago, it failed to crack deals with Ethiopian Telecommunications, Zambia’s Zamtel and Millicom’s Sri Lankan mobile network due to pricing and policy issues

[“source – business-standard.com”]