BSNL to Boost its Network Infrastructure and Launch 4G Services With Rs 4300 Crore

By June 11th, 2018 AT 4:03 PM

Bharat Sanchar Nigam Limited (BSNL) has been talking about its network expansion program for quite some time now, but it seems like the telco is finally looking to upgrade its infrastructure to meet the demand. The telco has now confirmed to borrow Rs 4,300 crore in the current financial year to fund its capital expenditure plans. However, at the same time, the telco also cleared that the new Rs 4,300 crore loan will not burden its debt level by any margin. As of March 2018, BSNL has a debt of Rs 9,000 crore which is significantly smaller than the private telecom operators.


“We are the less leveraged telco in the present competitive scenario. For the current financial year, the Rs 4,300 crore borrowing is for meeting capex requirements. This is a reflection of our healthy financial position, despite the fact that we don’t have Mumbai and Delhi circles for operations, no adequate spectrum to launch 4G services and our huge Rs 16,000 crore a year wage bill is met with internal revenue generation,” Anupam Shrivastava, chairman and managing director of BSNL said Financial Chronicle.

According to the higher official, the wage bill is for nearly 200,000 employees working with the organisation and if the wage bill comes down by Rs 3,000 crore, the PSU will become a dividend paying company.

Furthermore, Shrivastava added that “The Rs 4,300 crore will go towards network expansion. Any rise in capex, due to some unforeseen developments, will be met through internal revenue generation from services.”

BSNL is seeking 5 MHz of 2100 MHz band of spectrum to begin 4G operations in the country, but the government is yet to give a reply for the telco. And the telco is planning to use the Rs 4,300 crore for the network expansion program which also includes the launch of 4G services.

Speaking more on the new borrow, BSNL CMD stated that “We have decided to resort to borrowings as all revenue sources have been exhausted. This way through tight monitoring, we have been able to keep debt at Rs 9,000 crore. Our opex of Rs 26,000 crore is funded through internal accruals.”

The Indian telecom industry is currently going through some stiff competition and it’s debt-laden too. However, BSNL has been able to keep the debt at the same level since the entry of Reliance Jio. He added that BSNL has a healthy debt-equity ratio of 0.18 against the industry average of 0.79.

Not only in the telecom aspect, but BSNL is also heavily focusing on the broadband segment. The telco has launched various new broadband plans to take on the competition. BSNL is yet to announce its financial results for the quarter & year ended on March 31, 2018.

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