Telecom Giant To Step Up 4G Services, No Word On 5G
BSNL will raise long term bonds for Rs 40,399 Cr to help de-stress the balance sheet.
NEW DELHI, July 27 (The CONNECT) – Aiming to make public sector telecom giant BSNL financially viable, the Union Cabinet chaired today approved the revival package of BSNL amounting to Rs 1.64 Lakh Cr.
The package includes improving BSNL’s 4G services, but the government did not say word about launching 5G network which almost all private players are talking of.
Telecom is a strategic sector and the presence of BSNL in telecom market acts as a market balancer, an official statement said.
BSNL plays a crucial role in expansion of telecom services in rural areas, development of indigenous technology and disaster relief.
Revival measures, approved by the Cabinet meeting chaired by Prime Minister Narendra Modi, 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.
Upgrading 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 Cr 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 next 4 years, Government will fund capex of Rs 22,471 Cr. 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. Government will provide Rs 13,789 Cr 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 Cr to Rs 1,50,000 Cr in lieu of AGR dues, provision of capex and allotment of spectrum.
Government will provide 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 Cr. This will help restructuring existing debt and de-stressing the balance sheets.
Financial support for AGR dues: To further improve the balance sheet, AGR dues of BSNL amounting to Rs 33,404 Cr will be settled by conversion into equity. Government will provide funds to BSNL for settling the AGR/GST dues.
Re-issue of preference shares: BSNL will re-issue preference share of Rs 7,500 Cr 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