BSNL to Get Billions of Dollars from Government, Does the Telco Deserve It?

One of the major reasons why BSNL’s 4G needs to be successful is to ensure that people in rural and backward regions get access to mobile network services at more affordable rates. The private telcos can’t look at rural regions as a good business because of the return on investment would be really low.

Highlights

  • Bharat Sanchar Nigam Limited (BSNL), the state-run telecom operator in India is expected to get another big monetary help from the Government of India (GoI) in FY23.
  • With BSNL, there would be a fourth option available for the users. This fourth option would also bring in more affordable tariffs.
  • BSNL can also play the role of bringing indigenous network technology in India.

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Bharat Sanchar Nigam Limited (BSNL), the state-run telecom operator in India, is expected to get another big monetary help from the Government of India (GoI) in FY23. BSNL had already asked for help from the Department of Telecommunications (DoT) for rolling out 4G and meeting capex demands.

Back in 2019, BSNL had received a Rs 70,000 crore monetary package from the government. It majorly went into the Voluntary Retirement Scheme (VRS) for employees aged 50 and above. Now, almost two years after, BSNL wants more help from the DoT.

According to a PTI report, the GoI is planning to infuse around Rs 44,720 crore, which is more than $5 billion in FY23. This money would go towards the 4G spectrum, technology up-gradation, and restructuring in the state-run telecom operator. Some funds would again be allocated to the VRS. Further, BSNL would also be given Rs 3550 as a grant-in-aid for the payment of GST on the 4G spectrum.

This brings up an important question, does the telco need it?

BSNL Can Change 4G’s Outlook in India

Right now, Indians have only three options to look at with 4G. All the private telcos have sort of similar tariffs now. With BSNL, there would be a fourth option available for the users. This fourth option would also bring in more affordable tariffs. While the quality of 4G networks might not be the same, it would still offer users a strong option to be the secondary SIM on their devices in urban cities.

One of the major reasons why BSNL’s 4G needs to be successful is to ensure that people in rural and backward regions get access to mobile network services at more affordable rates. The private telcos can’t look at rural regions as a good business because the return on investment would be really low.

However, the state-run telco exists to provide connectivity services to the people of India. Further, with BSNL’s 4G, the load on the private telcos’ networks would reduce as well, which would again allow consumers to get better services.

BSNL can also play the role of bringing indigenous network technology to India. The state-run telco is already working with the Tata Consultancy Services (TCS) to roll out homegrown 4G. It can do the same with 5G in the foreseeable future.

In simple words, BSNL is too big a company to fail. Right now, the state-run telecom operator is working to ensure that its 4G networks are out as soon as possible. So, yes, BSNL needs the relief package. The state-run telco might not deserve it after so much of losses and really poor performance, but then it’s not really the telco’s fault at the end of the day. With BSNL, there have been a lot of interferences by many influential organisations, bodies, and at some level, the government, which has led to the current condition of the telco.

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