The Union cabinet approved a revival package of Rs 1.64 lakh crore to make the telecom PSU, BSNL, financially viable. The revival measures include 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 it.
Addressing a press conference, Telecom Minister Ashwini Vaishnaw said telecom was a strategic sector and the presence of BSNL acts as a market balancer. "BSNL plays a crucial role in expansion of telecom services in rural areas, development of indigenous technology and disaster relief."
The upgrade in the 4G services will come with allotment of spectrum. BSNL will be allotted spectrum in 900/1800 MHz band at a cost of Rs 44,993 crore through equity infusion. With this spectrum allocation, BSNL will be able to compete in the market and provide high speed data using their vast network, including in rural areas, the minister said.
"To promote indigenous technology development, BSNL is in the process of deploying Atmanirbhar 4G technology stack. To meet the projected capital expenditure for next four years, the government will fund capex of Rs 22,471 crore. This will be a significant boost to development and deployment of Atmanirbhar 4G stack," the cabinet statement said.
The government said despite the commercial non-viability, BSNL has been providing wire-line services in rural and remote areas to meet the social objectives of the government. "Government will provide Rs 13,789 crore to BSNL as viability gap funding for commercially unviable rural wire-line operations done during 2014-15 to 2019-20. The authorised capital of BSNL will be increased from Rs 40,000 crore to Rs 1,50,000 crore in lieu of AGR dues, provision of capex and allotment of spectrum," the statement read.
To improve the financial condition of the PSU, the government will provide sovereign guarantee for raising long term loan. "They will be able to raise long term bonds for an amount of Rs 40,399 crore. 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 crore will be settled by conversion into equity. Government will provide funds to BSNL for settling the AGR/GST dues. Also, BSNL will re-issue preference share of Rs 7,500 crore to the government," the statement added.
The minister hoped that 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 financial year 2026-27."
In a related decision, the cabinet approved a project for saturation of 4G mobile services in uncovered villages across the country at a total cost of Rs 26,316 crore. Last year, the government had approved a project for providing 4G mobile services in 7,287 uncovered villages in 44 aspirational districts across five states after Prime Minister Narendra Modi, in his Independence Day address in 2021, gave a call for saturation of government schemes.
Under this project, 4G mobile services will be provided in 24,680 uncovered villages in remote and difficult areas. The project has a provision to include 20 per cent additional villages on account of rehabilitation, new-settlements, withdrawal of services by existing operators. In addition, 6,279 villages having only 2G/3G connectivity will be upgraded to 4G. The project will be executed by BSNL using Atmanirbhar Bharat’s 4G technology stack and will be funded through Universal Service Obligation Fund. "The project cost of Rs. 26,316 crore includes capex and 5 year opex (operating expense). The project is a significant step towards the vision of the government to provide mobile connectivity in rural areas. This project will promote delivery of various e-governance services, banking services, tele-medicine, tele-education through mobile broadband and generate employment in rural areas," the cabinet statement said.