Home / Industry / Telecom /  ‘Allocation for BSNL part of revival plan’

The government will infuse 52,937 crore into state-run Bharat Sanchar Nigam Ltd (BSNL) in FY24, up from 44,720 crore for FY23 to revamp its wireline infrastructure, upgrade technology and launch 4G and 5G services to take on private telcos Reliance Jio, Bharti Airtel and Vodafone Idea.

However, 33.269 crore is estimated to have been spent so far in FY23.

On Wednesday, Union minister of communications , Ashwini Vaishnaw, said the higher allocation was part of BSNL’s 1.64 trillion revival package, which was announced in July 2022. Most of BSNL’s balance sheet items has already been addressed, he added.

“BSNL has raised new debt using the sovereign guarantees which were announced in the package. Now, the physical installation of towers, upgradation from 2G, 3G to 4G and 5G and a major revamp in the landline systems of MTNL and BSNL networks will be taken up in this year using the capital allocation of 53,000 crore," Vaishnaw said.

The Centre has earmarked 3,300 crore for the voluntary retirement scheme offered to the state-run telco’s employees, besides 18,127 crore for viability gap funding for FY23.

For FY24, the government has provisioned 2,218 crore as grant in aid for the telco’s GST payments for purchasing 4G spectrum, and another 2,671 crore for voluntary retirement scheme offered to employees of BSNL and MTNL.

Spilling out

The government-backed revival package included a 26,316 crore scheme for extending 4G services to close to 25,000 remaining villages, conversion of spectrum dues to equity, capex support, debt restructure with sovereign guarantee backing and viability gap funding for rural wireline operations.

As part of the package, BSNL will get spectrum in 900/1800 MHz band administratively at the cost of 44,993 crore through equity infusion, capex funding of 22,471 crore over next four years and 13,789 crore viability gap funding for rural wire-line operation. The company’s authorised capital will be raised from 40,000 crore to 1,50,000 crore in lieu of adjusted gross revenue (AGR) dues, provision of capex and allotment of spectrum. BSNL will be able to de-stress its balance sheet by refinancing debt with sovereign guarantee backed long term bonds for over 40,000 crore.

The BSNL revival move, which also includes its merger with Bharat Broadband Network Limited (BBNL) for better infrastructure utilisation, underscored the government’s policy of retaining one state-run business in strategic sectors.

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