In a significant move, the government has approved a third revival package for the state-run telco, Bharat Sanchar Nigam Limited (BSNL). The current revival package includes a total outlay of Rs 890.47 billion, an allotment of 4G/5G spectrum through equity infusion and an increase in the authorised capital of the telco from Rs 1.5 trillion to Rs 2.1 trillion.
The government’s move is meant to enable BSNL to emerge as a stable telecom service provider, focused on providing connectivity to the remotest parts of India. While announcing the third relief package, Ashwini Vaishnaw, Union Minister of Communications, Electronics and Information Technology and Railways, said that BSNL will stop losing its subscriber base by October or November 2023 to its competitors and will be in a strong position to provide stiff competition to private telecom operators by next year.
BSNL’s revival timeline
The first steps towards reviving the state-run telco were undertaken in 2019 when the government approved the first revival package for BSNL and Mahanagar Telephone Nigam Limited (MTNL) amounting to Rs 690 billion. This package brought some stability to BSNL/MTNL.
Later, in 2022, the government approved a second revival package for BSNL/ MTNL amounting to Rs 1.64 trillion. The second package provided financial support for capex, viability gap funding for rural landlines, financial support for de-stressing the balance sheet and settlement of adjusted gross revenue dues. Further, it also involved merging the operations of Bharat Broadband Network Limited with BSNL, which gave BSNL an additional 567,000 kms of optical fibre laid across 185,000 village panchayats through the Universal Service Obligation Fund.
As a result of these two packages, BSNL started earning operating profits from financial year 2021-22. Further, the total debt of BSNL has reduced from Rs 329.44 billion to Rs 222.89 billion. Moreover, BSNL has achieved strong growth in the home fibre segment and is now providing more than 100,000 new connections every month. The total revenue from the home fibre segment stood at Rs 20.71 billion during 2022, while the total home fibre subscriber base for BSNL in May 2023 stood at around 3.08 million.
Features of the third revival package
A key feature of the third revival package for BSNL is the allotment of 4G/5G spectrum through equity infusion. In particular, the telco has been allotted 10 MHz of spectrum paired in 22 licensed service areas (LSAs) in the 700 MHz band with a budgetary support of Rs 463.38 billion. Further, in the 3,300 MHz band, 70 MHz in 22 LSAs has been allotted with a monetary support of Rs 261.84 billion. Further, the government has allotted 800 MHz in 21 LSAs and 650 MHz in one LSA in the 26 GHz band, with an outlay of Rs 65.65 billion. Finally, in the 2,500 MHz band, the operator has been allotted 20 MHz in six LSAs and 10 MHz in two LSAs for Rs 94.28 billion. Over and above this, the package also includes a budgetary allotment of Rs 5.32 billion for miscellaneous items, taking the total budgetary support being provided under the third revival package to Rs 890.47 billion.
Spectrum push to speed up network deployment
With this spectrum allotment, BSNL will be able to provide pan-India 4G and 5G services along with 4G coverage in rural and uncovered villages under various connectivity projects. It will also be able to provide fixed wireless access (FWA) services for high-speed internet. In addition, BSNL can offer services/spectrum for CNPN (captive non-public network). The government also plans to scale up the deployment of its indigenous 4G/5G technology through BSNL’s network. After a few months of field deployment, it plans to rapidly roll out indigenous technology across the country using BSNL’s network.
Making giant strides
Since 2019, when the first revival package for BSNL was announced, the telco has come a long way in terms of improving financial metrics and network coverage. The telco has started moving swiftly on its 4G network roll-out plans and has reportedly issued a purchase order for the construction of 100,000 4G sites to Tata Consultancy Services (TCS) and ITI Limited. Earlier in May 2023, the state-run telco had issued advance purchase orders worth Rs 150 billion to the two companies. Of the total sites, 20 per cent will be deployed by ITI Limited. Meanwhile, TCS will supply 4G equipment for 100,000 sites for a total sum of approximately Rs 245 billion, which includes network gear for about Rs 130 billion, third-party items and a 10-year annual maintenance contract.
In terms of network coverage, the telco is providing 4G services on a limited scale in the Andaman & Nicobar Islands, Andhra Pradesh, Assam, Bihar, Chennai, Chhattisgarh, Gujarat, Haryana, Himachal Pradesh, Jammu & Kashmir, Jharkhand, Karnataka, Kerala, Kolkata, Madhya Pradesh, Maharashtra, the Northeast Odisha, Punjab, Tamil Nadu, Telangana, Uttar Pradesh (East), Uttar Pradesh (West), Uttaranchal and West Bengal (including Sikkim) circles.
Further, as a part of pilot testing, it has deployed 200 4G sites in three districts of Punjab. Under the development phase, the telco tested the system for 10 million simultaneous calls. It now plans to conduct live tests in Amritsar, Pathankot, Chandigarh and Firozpur till September 2023. Post that, it aims to rapidly roll out around 100-200 installations every day.
In the 5G domain, BSNL has announced plans to launch services in Mumbai and Delhi within one year. Further, BSNL has recently partnered with Larsen & Toubro Technology Services (LTTS) to deploy private 5G networks for enterprises in India. Under this partnership, BSNL will provide spectrum and network infrastructure, while LTTS will provide enterprises with devices, applications, technology, software, sensors, servers and core integration within the network infrastructure. BSNL had previously tied up with Amantya Technologies and Echelon Edge to set up private 5G networks for enterprises.
Net net, the third revival package and the spectrum allocations announced seem to be steps in the right direction that can enable BSNL to hold its ground and battle the fierce competition in the 5G space. However, speeding up the actual roll-outs of 4G and then 5G networks and ensuring top-level service quality would be key in deciding the telco’s position in the intensively competitive telecom space. s
Kuhu Singh Abbhi
