Revival of BSNL and merger of BBNL and BSNL approved
On Wednesday, the Union Cabinet approved a Rs. 1,64,000 crore rehabilitation plan for the state-run telecom company Bharat Sanchar Nigam Limited (BSNL). The Cabinet consequently approved the union of Bharat Broadband Network Limited, BBNL and BSNL.
The package will aim to improve the quality of BSNL services, it will be used to de-stress the balance sheet, and it will try to increase the company’s fibre reach, according to Telecom Minister Ashwini Vaishnaw, who spoke during a Cabinet briefing in New Delhi.
He added that the government would give BSNL an administrative allocation of spectrum to aid in the company’s 4G service expansion.
BBNL and BSNL
The government is approving the issuing of sovereign guarantee bonds for BSNL to repay bank debts in order to de-stress the balance sheet, the minister said. Statutory obligations worth Rs 33,000 crore will be converted into equity, he added.
The Telecom Ministry issued a statement saying, “Revival measures approved by the Cabinet focus on infusing additional money for upgrading BSNL services, allocating spectrum, de-stressing its balance sheet, and enhancing its fibre network by combining BBNL with BSNL.
The Cabinet-approved revival plans are as follows: A. BSNL service upgrades:
1. Spectrum allotment on an administrative basis: In order to enhance current services and offer 4G services, BSNL would be administratively granted spectrum in the 900/1800 MHz band at a cost of Rs 44,993 Cr through equity injection. BSNL would be able to compete in the market and offer high speed data using their extensive network, particularly in rural regions, with the use of this spectrum.
2. Financial support for capital expenditures: BSNL is deploying the Atmanirbhar 4G technology stack to encourage the development of domestic technology. The government will fund capex of Rs 22,471 Cr. to cover the anticipated capital expenditures over the next four years. This will significantly speed up the creation and implementation of the Atmanirbhar 4G stack.
3 BSNL has been offering wireline services in rural and isolated locations despite their lack of commercial viability in order to fulfil the government’s social objectives. In order to cover the viability gap for economically unviable rural wire-line operations carried out between 2014–15 and 2019–20, the government will give BSNL Rs 13,789 Cr.
4. Increase in authorized capital: In lieu of AGR payments, capital expenditures, and spectrum allocation, BSNL’s authorized capital will rise from Rs 40,000 Cr to Rs 1,50,000 Cr. B. Relieving financial stress on BSNL:
5. Debt structuring: In order to help these PSUs raise long-term debt, the government will offer a sovereign guarantee. They will be able to raise Rs 40,399 Cr in long-term bonds. This will aid in debt restructuring and balance sheet de-stressing.
6. Financial assistance for AGR obligations: In order to further strengthen the balance sheet, BSNL’s AGR obligations, which total Rs 33,404 Cr, will be paid by conversion into equity. The government would give BSNL money to pay the AGR/GST debts.
Regarding the merger, BSNL already has an optical fibre cable (OFC) network spanning more than 6.8 lakh kilometres.
The planned merger will give BSNL access to 5.67 lakh kilometres of optical fibre that have been installed nationwide over 1.85 lakh village panchayats with the help of the Universal Service Obligation Fund (USOF).