The union cabinet has approved a financial aid package of Rs1.64 lakh crore for state-run telecom provider Bharat Sanchar Nigam Limited (BSNL). This package is expected to help revive the company, which is currently struggling to stay relevant.
The cabinet, chaired by Prime Minister Narendra Modi, said that its measures to help the company on infusing fresh capital for upgrading BSNL services, allocating spectrum and de-stressing its balance sheet. Furthermore, the government is also planning to augment the company’s fibre network by merging it with Bharat Broadband Nigam Limited (BBNL).
The package, which has a cash component of Rs43,964 crore and a non-cash component of Rs1.2 lakh crore spread over four years, will include an administrative allotment of 4G spectrum worth Rs44,993 crore.
“The revival package will enable BSNL to improve services and generate a net profit in 3-4 years. Its 5G services launch will happen in the next 2 years,” Telecom Minister Ashwini Vaishnaw told reporters.
Meanwhile, the package includes Capex support of Rs22,471 crore, viability gap funding of Rs13,789 crore for rural wireline operations, and debt structuring by raising bonds with sovereign guarantee worth Rs40,399 crore. The package also offers financial support for AGR (Adjusted Gross Revenue ) dues worth Rs33,404 crore.
BSNL and MTNL had received a package of nearly Rs70,000 crore in 2019, which was aimed at their revival, while also approving the merger of the two entities.
Talking about the company’s performance now, Vaishnaw said, “BSNL has actually turned around after the 2019 package. It has made an operating profit of almost Rs1,000 crore. So, it is not that we have not seen any results of the previous package. It was a good result and that is what has given us hope and confidence that this is now a stable company.”
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 a profit in FY 2026-27.
