The Union Cabinet has approved a Rs 1.64-lakh crore revival package for the government-owned Bharat Sanchar Nigam Limited (BSNL), said Ashwini Vaishnaw, the minister for telecom, on July 27. The package will have three main elements – it will aim at improving the quality of BSNL services, will be used to de-stress the balance sheet, and will expand the company’s fiber reach by merging Bharat Broadband Network Limited (BBNL) with it.
The package will include cash support of Rs 43,964 crore and non-cash support of Rs 1.20 lakh crore, Vaishnaw said. The revival program is for a four-year period, but most of it will be implemented in the first two years, he added. The cash proponent will be used for spectrum allocation, capital expenditure, and viability gap funding, the minister noted.
“To improve existing services and provide 4G services, BSNL will be allotted Spectrum in 900/1800 MHz band administratively at the cost of Rs 44,993 crore through equity infusion. With this spectrum, BSNL will be able to compete in the market and provide high-speed data using their vast network including in rural areas,” an official release stated.BSNL is also in the process of deploying the “Atmanirbhar 4G” technology stack, the government said. “To meet the projected capital expenditure for next 4 years, the government will fund capex of Rs 22,471 crore. This will be a significant boost to the development and deployment of the Atmanirbhar 4G stack,” it added.
The government will also provide Rs 13,789 crore to BSNL as viability gap funding for commercially unviable rural wire-line operations done during 2014-15 to 2019-20. To de-stress the balance sheet, the government is approving a sovereign guarantee bond issuance for BSNL to repay the bank loans, Vaishnaw said. The state-run telecom service provider has around Rs 33,000 crore as bank debt.
The BSNL-BBNL’s combined fiber network will be of around 14 lakh km, Vaishnaw said, adding that high-speed optical fiber services are likely to get a boost across India, including in remote areas, after the merger comes into effect. Post the implementation of the revival package, BSNL will be able to expand 4G services to raise ARPU (average revenue per user) to Rs 170-180, the minister said. The administrative allocation of spectrum for 4G and 5G services for BSNL has also been approved by the Cabinet, he added. The rollout of BSNL 4G services is expected “in about 2 years”, and will significantly increase the revenue, Vaishnaw said.