New Delhi: State-owned telecom provider Bharat Sanchar Nigam Ltd (BSNL) has tied-up with two virtual network operators (VNOs) to generate additional revenue and boost its last mile reach.

The operator has teamed up with Singapore-based communications service provider Plintron and mobile payments gateway solutions company AdPay. BSNL expects the new revenue stream to contribute 650 crore in 2018-19, said Anupam Shrivastava, chairman and managing director, BSNL.

VNOs buy bulk bandwidth or talk time from a telecom operator or an internet service provider and utilizes it to sell its own branded services. It does not own either spectrum or network infrastructure. “These VNOs will buy bandwidth from us and do some value addition such as car insurance, content, etc., and sell to end-customers," Shrivastava said, adding that this also helps BSNL to add more subscribers.

“Tariffs will be decided mutually and they are free to do their own branding," he added.

As many as 67 entities have secured VNO licences from the department of telecommunications. Until recently, VNOs paid a licence fee and spectrum usage charges in addition to the required entry fee. But the department of telecommunications on 11 July approved the removal of double taxation for VNOs and now these entities will pay tax only on value addition.

“Change in licensing conditions and removal of double taxation has infused life in the VNO business," said Shrivastava. BSNL also aims to tie up with the remaining VNOs by the end of the current financial year.

“Tying up with VNOs is a good opportunity for BSNL as this will allow it to use their resources to the maximum as well as generate additional revenue," said Brijendra K. Syngal, former chairman and managing director, VSNL. “BSNL will be able to generate the target revenue, unless the VNOs fail to render their services or repay their dues to the operator."

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