Bharat Sanchar Nigam Ltd (BSNL) has proposed a capital investment plan of ₹77,000 crore over the next five years to set up 200,000 additional 4G sites, strengthen the telecom operator's network, roll out 5G in strategic high-traffic areas and improve customer support.
“With this capital infusion, the state-owned telecom operator is projected to reach operational breakeven by FY29 and achieve 98% nationwide coverage,” the department of telecommunications (DoT) informed the parliamentary committee on communications and information technology in a report dated 6 August.
Queries emailed to DoT and BSNL on the process and timeline of the capital expenditure proposal did not elicit any response at the time of publishing.
The parliamentary panel questioned the government over the operator’s financial efficiency, noting that while revenue from operations has risen from FY23 through FY26, the company’s overall financial position remains stressed.
BSNL’s loss widened to ₹4,738 crore in FY26 from ₹2,247 crore a year earlier. Revenue from operations rose 1.7% to ₹21,199 crore, significantly below the ₹28,476 crore target set under the memorandum of understanding between DoT and the telecom operator.
“The Committee are of the view that the Department and BSNL undertake a comprehensive expenditure rationalisation exercise, with special focus on controllable operational costs, increased sharing of mobile towers with other operators, network optimisation and prioritisation of high-revenue service segments such as 4G/5G rollout, enterprise services and fibre connectivity,” it said in the report.
In its response, DoT said BSNL’s net loss widened due to depreciation and amortization expenses, which grew to ₹10,350 crore in FY26 from ₹6,283 crore in FY25. It said the company incurred its largest capital expenditure of ₹26,022 crore in FY25 for the 4G network rollout and network expansion and that led to losses in FY26.
Growth foundation
The capex has also created an infrastructure foundation for future revenue growth, DoT informed the panel, adding that the company is on a clear path to a financial turnaround through network modernization, asset monetization, cost efficiency and enterprise focus.
BSNL had installed 105,290 4G indigenous sites by April end and is rolling out its 5G network in Delhi. The government has approved three revival packages for BSNL amounting to ₹3.22 trillion.
"Any capex plan will help improve revenue, but this fresh capex should not be just like another capital infusion from the government, on which no accountability is set, and return on investment is not analyzed,” said Satya N. Gupta, former principal adviser at the Telecom Regulatory Authority of India.
According to Gupta, what BSNL can do is raise capital through land monetization and through a real estate investment trust. The company can convert its buildings into data centres, generate revenue and invest its own capital for better accountability and return maximization.
For cost efficiency, the government is working on infrastructure-sharing arrangements between BSNL and Vodafone Idea, in which it holds a 49% share.
“There are active discussions to further enhance the tenancy of Vodafone Idea Limited on BSNL tower infrastructure for 4G and 5G,” DoT told the panel.
To generate additional revenue, BSNL leases out towers to private operators, including Vodafone Idea. BSNL had leased out 1,441 towers to Vodafone Idea as of April, according to the report.
For collaboration opportunities, BSNL has identified areas such as data centres and edge data infrastructure (decentralized data centres that are closer to the regions they serve), 5G captive private networks and AI-enabled use-cases, cloud, Internet of Things (IoT) and enterprise digital solutions, among others.
Currently, both companies have intra-circle roaming agreements for the Delhi and Mumbai regions on a revenue-sharing basis, under which BSNL subscribers can use Vodafone Idea’s network. BSNL also shares fibre links with Vodafone Idea under the BharatNet project and has even fiberized nine base stations as part of a proof of concept for better connectivity.
BSNL-Vodafone Idea coordination
The parliamentary panel told the telecom department to facilitate a structured and time-bound decision on comprehensive infrastructure-sharing between BSNL and Vodafone Idea. It asked for an analysis on sharing of towers, fibre, spectrum and other networks between the entities and estimated financial savings within six months.
“The Committee recommends that the proposed additional expenditure be reviewed and kept in abeyance until a clear decision on collaboration is finalised,” it said in the report.
However, DoT objected to the suggestion, saying that “BSNL collaborates with Vodafone Idea in the areas as mentioned above and is thus already rationalising its expenditure. Keeping additional expenditure completely at abeyance at this stage may adversely affect rollout of ongoing 4G project.”
In March, Mint first reported that Vodafone Idea and BSNL started talks on sharing towers, fibre and even spectrum in a push to cut costs, improve network reach for both operators and potentially accelerate 5G rollout after intervention of the parliamentary panel.