Centre approves Rs 1.64 lakh crore package to revive BSNL

The Union cabinet approved a revival package of Rs 1.64 lakh crore to make the telecom PSU, BSNL, financially viable.

The revival measures include infusing fresh capital for upgrading BSNL services, allocating spectrum, de-stressing its balance sheet, and augmenting its fiber network by merging Bharat Broadband Nigam Limited (BBNL) with it.

Addressing a press conference, Telecom Minister Ashwini Vaishnaw said telecom was a strategic sector and the presence of BSNL acts as a market balancer.

The upgrade in the 4G services will come with allotment of spectrum. BSNL will be allotted spectrum in 900/1800 MHz band at a cost of Rs 44,993 crore through equity infusion. 

With this spectrum allocation, BSNL will be able to compete in the market and provide high speed data using their vast network, including in rural areas, the minister said.

The government said despite the commercial non-viability, BSNL has been providing wire-line services in rural and remote areas to meet the social objectives of the government. 

"Government will provide Rs 13,789 crore to BSNL as viability gap funding for commercially unviable rural wire-line operations done during 2014-15 to 2019-20. The authorised capital of BSNL will be increased from Rs 40,000 crore to Rs 1,50,000 crore in lieu of AGR dues, provision of capex and allotment of spectrum," the statement read.

To improve the financial condition of the PSU, the government will provide sovereign guarantee for raising long term loan.

The minister hoped that with these measures, BSNL will be able to improve the quality of existing services, roll out 4G services and become financially viable.

In a related decision, the cabinet approved a project for saturation of 4G mobile services in uncovered villages across the country at a total cost of Rs 26,316 crore. 

Last year, the government had approved a project for providing 4G mobile services in 7,287 uncovered villages in 44 aspirational districts across five states after Prime Minister Narendra Modi, in his Independence Day address in 2021, gave a call for saturation of government schemes.

Under this project, 4G mobile services will be provided in 24,680 uncovered villages in remote and difficult areas.

The project has a provision to include 20 per cent additional villages on account of rehabilitation, new-settlements, withdrawal of services by existing operators. 

In addition, 6,279 villages having only 2G/3G connectivity will be upgraded to 4G. The project will be executed by BSNL using Atmanirbhar Bharat's 4G technology stack and will be funded through Universal Service Obligation Fund.