Cabinet Approves Revival Package for BSNL, focusing on 4G & 5G

The Union cabinet has given its nod to a significant revival package worth Rs 89,047 crore ($10.79 billion) for Bharat Sanchar Nigam Ltd (BSNL), the state-run telecom operator. This package aims to address BSNL's longstanding struggles and bolster its position in the Indian telecommunications industry.

As part of the revival measures, BSNL will receive equity infusion for the allocation of 4G/5G spectrum. In addition, the authorized capital of the company will be increased from Rs. 1,50,000 crore to Rs. 2,10,000 crore, according to a government press release.

The primary objective of this revival package is to transform BSNL into a stable telecom service provider with a specific focus on providing connectivity to remote areas of India. The infusion of funds and the deployment of advanced network technologies will play a crucial role in achieving this goal.

To facilitate the deployment of 4G services nationwide, BSNL recently entered into a partnership agreement with Tata Consultancy Services (TCS). This collaboration will support the expansion of BSNL's 4G network across the country. It is worth noting that BSNL's push for 4G services comes at a time when its competitors are already engaged in the rollout of 5G networks.

BSNL has faced significant challenges due to inadequate infrastructure and fierce competition from private telecom operators such as Reliance Jio, Bharti Airtel, and Vodafone Idea. Its rivals have already introduced 4G services at competitive prices, posing a considerable challenge to BSNL.

The revival package includes several key provisions that will enable BSNL to enhance its services and network capabilities:

1. Pan-India provision of 4G and 5G services.
2. Extending 4G coverage to rural and underserved villages as part of various connectivity projects.
3. Offering Fixed Wireless Access (FWA) services for high-speed internet.
4. Providing services and spectrum for Captive Non-Public Network (CNPN) purposes.

The government's move to provide financial support to BSNL represents a significant step in its efforts to revitalize the company. In 2019, the government had already implemented the first revival package for BSNL/MTNL, which helped stabilize their operations. This initial package involved an infusion of Rs 69,000 crore.

In 2022, the government introduced a second revival package worth Rs. 1.64 lakh crore for BSNL/MTNL. This funding was primarily allocated for spectrum allocation, capital expenditure, and viability gap funding. The combined effect of these two packages has enabled BSNL to generate operating profits since the fiscal year 2021-22. Furthermore, BSNL's total debt has significantly reduced from Rs. 32,944 crore to Rs. 22,289 crore, as indicated by government data.

With the latest revival package, BSNL is poised to make substantial progress in upgrading its infrastructure, expanding its 4G and 5G capabilities, and improving its services across the country. This initiative is expected to position BSNL as a reliable telecom service provider, particularly in underserved areas, and contribute to the overall development of India's digital ecosystem.