According to industry sources, the government has granted a Rs 190 billion sovereign guarantee to Bharat Sanchar Nigam Limited (BSNL) to allow the telco to restructure its debt and that of Mahanagar Telephone Nigam Limited (MTNL).
The two telcos have a combined debt of Rs 600 billion, of which Rs 330 billion is on the books of BSNL. As per the sources, another similar amount of bank guarantee will be granted to the firm in the next financial year to further reduce the debt burden.
Besides, the government had recently given Rs 50 billion to BSNL, which has allowed it to clear a certain amount of vendor dues. The firm has disbursed Rs 32 billion to various vendors so far. Further, more spectrum will be given to the telco so that can continue to try and be competitive against the private sector players. The government plans to allocate spectrum in the 900 MHz and 1800 MHz bands soon. It will allow the company to provide 4G services and improve existing operations.
