To enable BSNL (Bharat Sanchar Nigam Limited) to compete with the private telecom operators, the government will allocate Rs 6,000 crore to the telco. BSNL will use this money to procure 4G network gear. The Department of Telecommunications (DoT) is infusing this capital into BSNL because the state-run telco doesn't have sufficient funds. The absence of 4G has led to a severe decline in the number of subscribers for BSNL. However, the capital infusion won't happen right away. DoT needs permission from the Cabinet to do so.
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To recall, BSNL had issued an advance purchase order of Rs 6000 crore to start with the 4G rollout for 1 lakh sites across India. However, when BSNL placed the order, it was for Rs 13,000 crore to Tata Consultancy Services (TCS) and ITI. This was Rs 6,000 crore less than the advance purchase order that BSNL had issued.
This 6000 crore is what DoT is funding so that BSNL can procure the required gear. BSNL's financials are not in a good place due to a declining subscriber base and lower tariffs than competition. The Indian government had to step in multiple times in the last five years to save BSNL and MTNL from going down.
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Now, the next step for MTNL is to transfer all of its operations to BSNL. MTNL will not be merged with BSNL, but it won't operate its services as a separate entity anymore. All the operations of MTNL will be executed by BSNL, even as the brand MTNL will not go anywhere. By Diwali of 2024, the Indian government expects BSNL to deploy over 75000 sites. So far, 25,000 sites have already been deployed. BSNL needs 4G to attract new subscribers and also has to figure out a way to reduce the churn rate.
