It hasn’t been long since the last relief package of Rs 70,000 crore was announced for the state-run telecom company, Bharat Sanchar Nigam Limited (BSNL). Now, at the dawn of 2022, the government is mulling about another relief package for the telco. As per a FinancialExpress report, preliminary talks between the Department of Telecommunications (DoT) and BSNL officials regarding the same have already started.
What Will Be the New Relief Package Focused on and What Happened to the Earlier Relief Package?
As mentioned above, the telecom operator received a Rs 70,000 crore relief package back in 2019. Out of this money, around Rs 29,937 crore was used for the voluntary retirement scheme (VRS) for employees aged 50 and above. The VRS has helped the telco save around Rs 7,000 crore in employee costs.
Talking about the new revival package, it would help the telco in addressing the recent issues raised by the company. BSNL had raised concerns about the high cost of homegrown 4G deployment and for the same was looking for Rs 37,105 crore from the government. Further, the telcos’ revenue market share has fallen because of the absence of 4G networks PAN India.
There are administrative costs as well which the new relief package would help with. In FY21, BSNL’s revenues fell by 2% YoY to Rs 18,595 crore. But at the same time, the company was able to narrow its losses by almost 50% to Rs 7,441 crore in FY21 as compared to Rs 15,449 crore in FY20. A large reason for this was the reduced cost in the employees’ department.
BSNL is going to require a lot of help from the government for achieving a timely 4G rollout. The state-run telco plans to install one lakh indigenously developed 4G sites which would require Rs 12,500 crore and another Rs 5,000 crore for other expenses such as fiberisation, IT systems, and transmission network equipment.