Rs 1.64 lakh crore revival package for BSNL gets Cabinet nod

The four-year revival strategy follows a 2019 booster, when the government had announced a Rs 70,000-crore package mainly to cover a voluntary retirement scheme for BSNL employees.

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Union Minister for Railways, Communications, Electronics and Information Technology Ashwini Vaishnaw. (Express archive photo)

The Union Cabinet on Wednesday cleared a Rs 1.64-lakh crore package for revival of state-owned telecom service provider Bharat Sanchar Nigam Ltd (BSNL), with the focus on fresh capital for upgrading the loss-making company’s network and allocating spectrum for it to offer 4G services, de-stressing its balance sheet and augmenting its fiber network.

The four-year revival strategy follows a 2019 booster, when the government had announced a Rs 70,000-crore package mainly to cover a voluntary retirement scheme for BSNL employees.

Of the total revival package announced Wednesday, Rs 43,964 crore will be a cash component, while the remaining Rs 1.2 lakh crore of non-cash component will be spread over four years. The Centre will make administrative allocation of spectrum BSNL needs to offer 4G services. The allocation of spectrum in 900/1,800 MHz band at the cost of Rs 44,993 crore would be through equity infusion.

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“The 2019 relief package gave BSNL a lifeline. Before that, it was making operational losses, which wasn’t sustainable. The package helped BSNL in becoming operational profitable. With the latest relief package, we expect BSNL to become net profitable in the next three-four years,” Minister of Communications Ashwini Vaishnaw told reporters.

To meet the projected capital expenditure (capex) for the next four years, the Centre will fund capex of Rs 22,471 crore for developing 4G technology stack, while providing Rs 13,789 crore to BSNL as viability gap funding for commercially unviable rural wireline operations done between FY15 and FY20, he added.

Further, to enhance the operator’s wireline offering, the Telecom Department has proposed the merger of Bharat Broadband Nigam Ltd (BBNL) with BSNL. BBNL is the nodal agency for executing the BharatNet project. The infrastructure created under BharatNet will continue to be a national asset, accessible on a non-discriminatory basis to all the telecom service providers.

To de-stress the balance sheet, Rs 33,404 crore statutory dues will be converted into equity. The Centre will also provide sovereign guarantee for raising money to repay current loans.