Cabinet  approves Rs 1.64 lakh revival package of BSNL

Cabinet approves Rs 1.64 lakh revival package of BSNL

New Delhi, July 27, 2022

The Union Cabinet chaired by Prime Minister Narendra Modi today approved a revival package worth Rs 1.64 lakh crore for the public sector telecom company Bharat Sanchar Nigam Limited (BSNL) so that it becomes financially viable.

"Telecom is a strategic sector. Presence of BSNL in telecom market acts as a market balancer. BSNL plays a crucial role in expansion of telecom services in rural areas, development of indigenous technology and disaster relief," an official press release said.

The release said the revival measures approved by the Cabinet focus on infusing fresh capital for upgrading BSNL services, allocating spectrum, de-stressing its balance sheet, and augmenting its fiber network by merging Bharat Broadband Nigam Limited (BBNL) with BSNL.

To improve existing services and provide 4G services, BSNL will be allotted spectrum in 900/1800 MHz band administratively at the cost of Rs 44,993 crore through equity infusion. With this spectrum, BSNL will be able to compete in the market and provide high speed data using their vast network including in rural areas.

To promote indigenous technology development, BSNL is in process of deploying Atmanirbhar 4G technology stack. To meet the projected capital expenditure for the next four years, the Government will fund capex of Rs 22,471 crore. This will be a significant boost to development and deployment of Atmanirbhar 4G stack, the release said.

Despite the commercial non-viability, BSNL has been providing wireline services in rural and remote areas to meet the social objectives of the Government. The Government will provide Rs 13,789 crore to BSNL as viability gap funding for commercially unviable rural wire-line operations done during 2014-15 to 2019-20.

The authorized capital of BSNL will be increased from Rs 40,000 crore to Rs 1,50,000 crore in lieu of AGR dues, provision of capex and allotment of spectrum.

The Government will provide sovereign guarantee to the PSU for raising long term loan. It will be able to raise long term bonds for an amount of Rs 40,399 crore. This will help restructuring existing debt and de-stressing the balance sheet.

To further improve the balance sheet, AGR dues of BSNL amounting to Rs 33,404 crore will be settled by conversion into equity. Government will provide funds to BSNL for settling the AGR/GST dues.

BSNL will re-issue preference shares of Rs 7,500 crore to the Government.

To facilitate wider utilization of infrastructure laid under BharatNet, Bharat Broadband Network Ltd (BBNL) will be merged with BSNL. The infrastructure created under BharatNet will continue to be a national asset, accessible on a non-discriminatory basis to all the Telecom Service Providers.

"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," the release added.


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