The Union Cabinet has approved the third revival package for Bharat Sanchar Nigam Limited (BSNL) with a total outlay of Rs 890.47 billion. It includes an allotment of 4G/5G spectrum for the telco through equity infusion. The authorised capital of the company will be increased from Rs 1.5 trillion to Rs 2.1 trillion.
In the 700 MHz band, the telco has been allotted 10 MHz paired in 22 licenced service areas (LSAs) with budgetary support of Rs 463.38 billion, while in the 3300 MHz band, 70 MHz in 22 LSAs has been allotted with 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. Lastly, in the 2500 MHz, the operator has been allotted 20 MHz in six LSAs and 10 MHz in two LSAs for Rs 94.28 billion. Overall, the total budgetary support stands at Rs 890.47 billion, including miscellaneous items.
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 captive non-public network (CNPN). According to the government, BSNL will emerge as a stable telecom service provider focused on providing connectivity to remotest parts of India.
While announcing the 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 and will be in a position to give stiff competition to the private telecom operators in the next year. He informed that BSNL is providing more than 100,000 new connections every month and the total home fibre subscriber base of BSNL in May 2023 is around 3.08 million.
The government approved the first revival package for BSNL/MTNL in 2019. It amounted to Rs 690 billion. In 2022, the government approved a second revival package for BSNL/MTNL amounting to Rs 1.64 trillion. It 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 (AGR) dues, the merger of Bharat Broadband Network Limited (BBNL) with BSNL, etc. As a result of these two packages, BSNL has started earning operating profits since FY 2021-22. The total debt of BSNL has reduced from Rs 329.44 billion to Rs 222.89 billion.
Industry reactions:
Commenting on the development, Ankit Agarwal, managing director (MD), STL, said, “We are thrilled to witness the approval of the revival package for BSNL, which includes a substantial capital infusion. The decision to support BSNL signifies government’s commitment towards speeding up the process of digital adoption in the country and make aggressive investments in building a future-ready digital infrastructure. With digital adoption at its peak in the country, this initiative will be a springboard for India to become an atmanirbhar digital superpower with consistent access to digital services even in the remote villages of the country.”
Meanwhile, Mahendra Nahata, MD, HFCL, said, “BSNL is of strategic importance to the nation and the government’s revival package will go a long way to safeguard national interest while also promoting competition and consumer choice. The relief package of Rs 890 billion for BSNL will help it emerge as a strong player, upgrade the operators network, help deleverage its balance sheet and it will be a crucial step towards ensuring growth of the telecom sector. It will further result in powering 4G networks in rural India, thereby unlocking last mile connectivity and bridging the existing digital divide. With strong data governance practices and a robust cyber resilience framework, the revival of BSNL will help in building resilient network security solutions. The increased authorised capital also reflects the government’s commitment towards BSNL’s capabilities of driving a larger vision and creating a level-playing field while also developing a consumer-centric telecom landscape. This strategic decision will further encourage key players like BSNL to contribute significantly in achieving our government’s vision of building indigenous 4G/5G India tech stack which will be a huge enabler towards encouraging indigenous manufacturing, innovation and achieve the vision of an ‘Atma Nirbhar’ Bharat. As a significant contributor in the telecommunication industry, we foresee this strategic initiative resulting in a plethora of opportunities and enable organisations like HFCL to capitalise on our combined field expertise and strong technological capabilities, to offer world-class telecom services.”
