Rs 1.64 lakh crore package for BSNL revival

Ashwini Vaishnaw, the telecom minister, announced that the Union Cabinet has approved a Rs 1.64 lakh crore revitalization package for the government-owned Bharat Sanchar Nigam Limited (BSNL).

The package's three primary components are to increase the calibre of BSNL services, de-stress the balance sheet, and broaden the company's fibre network by combining with Bharat Broadband Network Limited (BBNL).

According to Vaishnaw, the package will contain non-financial support worth Rs 1.20 lakh crore and cash support of Rs 43,964 crore. The majority of the rejuvenation programme will be carried out in the first two years of its four-year duration, he noted.

According to the minister, the cash proponent would be used for paying the viability gap, capital expenditures, and spectrum allotment.

"For a cost of Rs 44,993 crore in equity injection, administrative spectrum in the 900/1800 MHz band would be granted to BSNL in order to enhance current services and offer 4G services. BSNL would be able to compete in the market and offer high-speed data using their extensive network, particularly in rural regions, with the use of this spectrum "An official statement was made.

According to the government, BSNL is also implementing the "Atmanirbhar 4G" technological stack. "The government would provide funding for capex of Rs 22,471 crore to cover the anticipated capital expenditures over the next four years. This would significantly speed up the creation and implementation of the Atmanirbhar 4G stack "It was ad.

Additionally, the government will give BSNL Rs 13,789 crore as viability gap support for commercially unsuccessful rural wire-line works carried out between 2014–15 and 2019–20.

"In lieu of AGR dues, supply of capex, and spectrum allocation, the authorised capital of BSNL would be increased from Rs 40,000 crore to Rs 1,50,000 crore," the press release stated.

According to Vaishnaw, the government is approving the issuing of sovereign guarantee bonds for BSNL to pay back the bank loans in order to de-stress the balance sheet. The government-run telecom operator owes banks almost Rs 33,000 crore.

"The conversion of BSNL's AGR obligations, totaling Rs 33,404 crore, will pay them off. The official announcement stated that "Government will grant cash to BSNL for the settlement of the AGR/GST dues" and further stated that "BSNL will re-issue preferred share of Rs 7,500 crore to the Government." ".

According to Vaishnaw, the package also includes sovereign guarantee bonds for the BSNL subsidiary Mahanagar Telephone Nigam Limited (MTNL).

The government-owned broadband infrastructure provider BBNL's merger will enable greater use of the BharatNet-installed infrastructure.

According to Vaishnaw, the combined fibre network of BSNL and BBNL would cover around 14 lakh km, and after the merger takes effect, high-speed optical fibre services are projected to improve throughout India, particularly in remote places.

The minister stated that following the implementation of the revival package, BSNL will be able to increase 4G services to increase ARPU (average revenue per user) to Rs 170-180.

The Cabinet has also approved the administrative allocation of spectrum for BSNL's 4G and 5G services, he continued.

According to Vaishnaw, the launch of BSNL 4G services is anticipated to boost income significantly "in roughly 2 years."

According to a July 19 press release from the Telecom Regulatory Authority of India, as of May 31, 2022, the private telecom service providers held 89.87 percent of the market share of wireless subscribers, while BSNL and MTNL, the two PSU access service providers, had a market share of only 10.13 percent.

In addition to revitalising BSNL, the Rs 1.64 lakh crore restoration plan is anticipated to provide a sizable quantity of employment. According to Vaishnaw, the government "expects to produce 1 lakh jobs."

We will hold BSNL to very well defined targets and outcomes since we are investing taxpayer money, he continued.

According to the official statement, BSNL is anticipated to recover and "make profit in FY 2026-27" if the revival plan is put into action.