BSNL Will Take On Competition After Merger With MTNL, VRS and 4G Spectrum Allocation

Bharat Sanchar Nigam Limited (BSNL) was neck-deep in financial troubles since the last few years. The troubles became even more detrimental as Reliance Jio made its entry to the Indian telecom industry and bruised the sector with the data tariff war, thus hurting the financials of other telecom operators severely including BSNL. However, out of all the telecom operators, BSNL was the most in trouble with heavy debts and payments pending to vendors and its other operational creditors. On top of that, the telco was also dealing with a high churn rate of subscribers, falling revenue, and very high salaries to the employees. With all of this bringing down the financial sheets of BSNL, it was getting hard for the telecom operator to compete in the industry with the private telcos. But, now the government has brought forth a revival package for BSNL which includes VRS, 4G spectrum allocation and more and this is how it will help the ailing telecom company.

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BSNL Will First Solve its Cash Problem

As per the decision granted by the Union Cabinet on the fate of BSNL, the government has decided that it would invest a total of Rs 23,937 crore in this revival plan. Not only this, but the companies would be raising sovereigns bonds worth Rs 15,000 crore which would help it in getting its operations back on track. BSNL has a massive debt on its shoulders, which it will need to pare off, in addition to paying off its vendors which have been circling for their pending payments. Another way BSNL will bring cash on the table for its operations would be by monetising its land and fibre assets. Since the two companies would be merged, then the combined assets of BSNL and MTNL worth Rs 38,000 crore would be monetised by the merged entity to raise more capital.