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State-owned telecom giants BSNL and MTNL are accelerating the monetization of their valuable land assets, worth over INR 1 lakh crore, by prioritizing sales to government organizations. This is because selling to government entities is a cleaner and smoother process. This strategic move aims to revive the ailing telecom firms, which have already received substantial government revival packages. While the land monetization process has been slow, the companies are now taking proactive steps, including creating a dedicated website for property listings and engaging with central and state authorities. Property consultants view this as a significant opportunity in the current real estate market scenario, particularly for assets present in prime commercial and residential locations across major Indian cities.
State-owned telecom companies Bharat Sanchar Nigam Ltd (BSNL) and Mahanagar Telephone Nigam Ltd (MTNL) have decided to prioritize the sale of their land assets, worth over INR 1 lakh crore, to government organizations at both the state and central levels. Advertisement
According to an official familiar with the details, the companies will only offer these properties to private enterprises through auctions if the government organizations do not require them. The official stated that selling to government entities is cleaner and smooth and does not involve unnecessary litigation.
Recently, BSNL sold one of its properties in Lucknow to the Income Tax department for around INR 229 crore, which was the market value of the building. The official clarified that the rates are not subsidized, and the companies fix the market value for the properties. The government departments are simply able to acquire these properties without going through an auction.
So far, BSNL has raised INR 1,600 crore through the sale of properties to both government departments and private entities. The company plans to generate INR 20,000 crore in the next 4-5 years through the monetization of its land assets.
Property consultants view the monetization of BSNL and MTNL's land and properties in major Indian cities as a strategic opportunity in the current real estate market scenario. The post-pandemic resurgence in commercial and residential property markets, particularly in cities like Mumbai, Bengaluru, Delhi, and Hyderabad, has increased interest in these high-value land parcels, which are located in prime areas with significant commercial and residential potential.
To facilitate the process, the telecom secretary has written to all central ministries and state chief secretaries, informing them about the availability of these properties. BSNL has also developed a dedicated website listing the properties available for outright sale across the country.
However, the land monetization process has been slow so far, and the government has recently pulled up both BSNL and MTNL for the slow pace of asset sales. The companies have been asked to prepare a detailed list of land parcels with proper valuation according to current market rates.
Land monetization is a crucial strategy for reviving the ailing telecom firms. The government has already provided revival packages worth INR 69,021 crore in 2019 and INR 1.64 lakh crore in 2022 to improve the companies' operations, which have started earning operational profits since 2020-21. Additionally, the government has approved the allotment of 4G/5G spectrum to BSNL with a total outlay of around INR 89,047 crore through equity infusion.
With the government's support and a renewed focus on asset sales, the telecom firms are poised to unlock the true value of their land parcels, which can provide a sustainable financial foundation for their future growth and development.
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