On Wednesday, the Cabinet approved the relief package for BSNL (Bharat Sanchar Nigam Limited) worth Rs 1.67 lakh crore. A note from the government said that the presence of BSNL acts as a market balancer in the telecom market. Thus the Union Cabinet led by Narendra Modi has approved the revival package of BSNL amounting to Rs 1.67 lakh crore. The revival measures will focus on infusing fresh capital into state-run telco for upgrading the services of BSNL, de-stressing the balance sheet, allocating spectrum, and a merger with the BBNL (Bharat Broadband Network Limited).
Take a look at the details of the relief package and how it will impact BSNL.
A) Upgrading Services of BSNL:
Firstly, BSNL will be allocated 4G spectrum in the 900 MHz and 1800 MHz bands for providing 4G services in India. The cost of this will be Rs 44,993 crore.
Secondly, since BSNL is deploying an indigenously developed 4G stack, the government will fund its capex needs amounting up to Rs 22,471 crore in the next four years.
Thirdly, BSNL will receive Rs 13,789 crore from the Indian government in the form of viability gap funding for offering services in areas where there is no profitability or commercial interest present. For this, the government will give BSNL Rs 13,789 crore.
Fourth, the government has increased the authorised capital of BSNL from Rs 40,000 crore to Rs 1,50,000 crore in lieu of AGR (Adjusted Gross Revenue) dues, allotment of spectrum and provision of capex.
B) De-Stressing BSNL Balance Sheet:
One of the goals of the government through this relief package is to reduce the stress on the balance sheet.
So the fifth thing that the government will do is provide a sovereign guarantee for raising long-term loans. PSUs will be able to raise long-term bonds for an amount of Rs 40,399 crore, and this will help with restructuring existing debt.
The sixth thing is the government will convert Rs 33,404 crore worth of AGR dues of BSNL into equity for itself and settle the amount. BSNL will get funds from BSNL to settle AGR/GST dues.
The seventh thing that the government said will be done is BSNL will be re-issuing preference shares worth Rs 7,500 crore to the government.
C) BSNL and BBNL Merger
This is the eighth and final thing where BBNL will be merged with BSNL. This will allow for wider utilisation of the fibre infrastructure that BBNL has already deployed in India. It is worth noting that BharatNet Project is still going to be a national asset and allow TSPs (Telecom Service Providers) to leverage it to offer non-discriminatory services to Indians.
"With these measures, BSNL will be able to improve the quality of existing services, roll out 4G services and become financially viable. It is expected that with the implementation of this revival plan, BSNL will turn around and earn profit in FY 2026-27," a release from Cabinet said.
