The Union Cabinet approved a package worth Rs. 1.64 lakh crore on Wednesday to revive the state-owned telecom company Bharat Sanchar Nigam Ltd (BSNL). The money will be used to upgrade the company’s network, allocate spectrum so it can provide 4G services, de-stress its balance sheet, and expand its fibre network.
Following a 2019 boost, when the government offered a Rs 70,000 crore package primarily to finance a voluntary retirement programme for BSNL employees, the four-year rehabilitation strategy was revealed.
The entire rehabilitation package unveiled on Wednesday would include a cash component worth Rs. 43,964 crore and a non-cash component worth Rs. 1.2 lakh crore that will be spread out over four years. The spectrum that BSNL requires to provide 4G services will be administratively allocated by the Center. Through equity injection, spectrum in the 900/1,800 MHz band would be allocated for Rs 44,993 crore.
“BSNL received a lifeline from the 2019 aid package. Prior to then, it was experiencing unsustainable operational losses. The deal made it possible for BSNL to operate profitably. With the most recent relief measure, we anticipate BSNL will achieve net profitability in the following three to four years, Communications Minister Ashwini Vaishnaw told reporters.
The Centre would pay capex of Rs 22,471 crore for creating the 4G technology stack, while giving Rs 13,789 crore to BSNL as viability gap support for economically unviable rural wireline activities carried out between FY15 and FY20, the official continued.
The Telecom Department has also suggested that BBNL and BSNL unite in order to improve the operator’s wireline service. The key organisation for carrying out the BharatNet initiative is BBNL. The BharatNet-built infrastructure will continue to be a national resource that is open to all telecom service providers without restriction.
Statutory obligations of Rs 33,404 crore will be converted into equity in order to relieve balance sheet stress. Additionally, the Center will offer a sovereign guarantee for generating funds to pay off existing debts.
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