The Indian government has given Bharat Sanchar Nigam Limited (BSNL), a state-run telco, a sovereign guarantee of Rs 19,000 crore. Through this, BSNL would be able to restructure its debt along with that of MTNL's (Mahanagar Telephone Nigam Limited) debt. According to an ET Telecom report, BSNL and MTNL have a combined debt of Rs 60,000 crore. Over Rs 33,000 crore debt is in the books of BSNL, and the remaining is of MTNL. This is not all, though. The report mentions that a similar amount will be offered to BSNL again in the next financial year. This would help the company in reducing its debt from the books.
It is worth noting that apart from the sovereign guarantee, BSNL got Rs 5,000 crore from the government for partly clearing its vendor dues. So far, BSNL has cleared Rs 3,200 crore worth of dues to several vendors.
BSNL will also be provided with more spectrum very soon. A DoT official said that BSNL would be given airwaves in the 900 MHz and 1800 MHz bands to help with the 4G rollout. BSNL has plans to roll out 4G in over 100,000 sites across India with the help of Tata Consultancy Services (TCS).
The Indian government has become very focused on helping BSNL return to profitability. But that won't happen until and unless BSNL can roll out 4G widely in India and then also, through marketing campaigns and good services, steal some of the subscriber market share of the telcos.
