Fri. Mar 29th, 2024
Union Cabinet approves revival package of BSNL worth Rs 1.64 Lakh Crore

To make state-owned telecom service provider BSNL financially viable, the Union Cabinet chaired by Prime Minister Narendra Modi on Wednesday approved the revival package of BSNL worth Rs 1.64 Lakh Crore.

Revival measures approved by the Cabinet stress 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.

“It is expected that with the implementation of this revival plan, BSNL will turn around and earn profit in FY2026-27,” Telecom Minister Ashwini Vaishnaw said.

To improve existing services and provide 4G services, the government will allot BSNL Spectrum in 900/1800 MHz band administratively at the cost of Rs 44,993 Cr through equity infusion.

To meet the projected capital expenditure for next 4 years, the 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 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 government  will  increase the capital of BSNL from Rs 40,000 Cr to Rs 1,50,000 Cr in place of AGR dues, provision of capex and allotment of spectrum.

Government will provide sovereign guarantee to PSUs for raising long term loans. 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.

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 or GST dues.

BSNL will re-issue preference share of Rs 7,500 Cr to the Government.

To facilitate wider utilization of infrastructure laid under BharatNet, Bharat Broadband Network Ltd (BBNL) will be merged with BSNL.  The infrastructure created under BharatNet will continue to be national asset, accessible on a non-discriminatory basis to all the Telecom Service Providers, reads a cabinet press release.

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