BSNL gets Rs 1.64 lakh crore revival package; cabinet clears BBNL, BSNL merger

New Delhi [India], July 27 : In a bid to revive the ailing public sector telecom operator Bharat Sanchar Nigam Limited, the Union Cabinet chaired by Prime Minister Narendra Modi on Wednesday approved a slew of measures including a package amounting to Rs 1.64 lakh crore and merger of Bharat Broadband Nigam Limited (BBNL) with BSNL.
Addressing a media briefing after the cabinet meeting Union Minister of Railways, Communications, Electronics and Information Technology, Ashwini Vaishnaw said the package is a "combination of cash support and non-cash support."
To make BSNL financially viable, the Union Cabinet has approved the revival package of BSNL amounting to Rs 1.64 lakh crore, he said.
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 fibre network by merging Bharat Broadband Nigam Limited (BBNL) with BSNL.
The minister said telecom is a strategic sector. The presence of BSNL in the telecom market acts as a market balancer. BSNL plays a crucial role in the expansion of telecom services in rural areas, development of indigenous technology and disaster relief.
He said the package announced by the government in 2019 has helped in stabilising the financial conditions of BSNL.
"The attrition of customers has stopped. Revenue which was going down has become stable at Rs 19,000 crore," he said.
The minister said the revival package approved by the union cabinet has three elements -- to improve services, de-stress the balance sheet and expansion of fibre network.
As part of the de-stressing of the balance sheet, the cabinet has approved a proposal to convert Rs 33,000 crore statutory dues into equity and a similar amount of bank loans will be repaid through the issue of low-interest bonds.
To facilitate wider utilisation 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, according to an official statement released after the cabinet meeting.
With the BBNL merger, BSNL will get an additional 5.67 lakh kilometres of optical fibre which has been laid across 1.85 lakh village panchayats in the country using the Universal Service Obligation Fund (USOF). Currently, BSNL has an optical fibre cable network of over 6.83 lakh kilometres.
The revival package includes a slew of measures to upgrade BSNL services. 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 4 years, Government will fund capex of Rs 22,471 crore. This will be a significant boost to development and deployment of Atmanirbhar 4G stack.
Despite the commercial non-viability, BSNL has been providing wireline services in rural/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 authorised 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.
As a part of de-stressing BSNL balance sheet, the government will provide a sovereign guarantee to these PSUs for raising long-term loan. They will be able to raise long term bonds for an amount of Rs 40,399 crore. This will help in restructuring existing debt and de-stressing the balance sheets.
To further improve the balance sheet, AGR dues of BSNL amounting to Rs 33,404 crore will be settled by conversion into equity. The government will provide funds to BSNL for settling the AGR/GST dues. BSNL will re-issue a preference share of Rs 7,500 crore to the government.
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 government claimed in the statement.