The Union Cabinet endorses a $1.64 trillion plan to revive BSNL

28 Jul 2022 , 08:37 AM

As part of a four-year recovery plan, the Union Cabinet on Wednesday approved a package of Rs1.64 trillion for Bharat Sanchar Nigam Ltd (BSNL). A combination of financial assistance, debt restructuring, viability-gap funding, and administrative spectrum allocation is included in the package. These measures could assist the state-owned telecom service provider in de-stressing its balance sheet, enhancing its landline network, and introducing 4G service.

According to Telecom Minister Ashwini Vaishnaw, “BSNL is anticipated to come around and make profit in FY2026-27 with the implementation of this rehabilitation plan.”

To strengthen BSNL’s infrastructure and support its telephony services, the Cabinet also authorized the merger of Bharat Broadband Network Limited (BBNL), a government-owned special purpose organization, with BSNL. In addition, an Rs26, 316 crore plan to serve over 30,000 villages with 4G mobile service utilizing a locally created 4G technology stack was approved.

After an Rs69,000 crore plan in 2019, which comprised equity injection, asset monetization, the merging of BSNL with MTNL, and a voluntary retirement program, this is the second revival package that the government has approved in three years.

Due to BSNL’s heavy losses (over Rs50,000 crore in the last five years) and outdated technology, revenues and client base have decreased. Vaishnaw defended the government’s action, saying it was deliberate and consistent with its goal of keeping a strong public sector unit in a vital area.