On 27th July 2022, the Union Cabinet, presided over by Prime Minister Narendra Modi, approved the Rs 1.64 Lakh Cr. revitalization package for the government telecom company Bharat Sanchar Nigam Limited – BSNL in order to make it financially sustainable. Additionally, the Union Cabinet gave its approval to a project that would cost a total of Rs. 26,316 Cr. and will bring 4G mobile services to all unconnected villages in the nation.
Revival package for BSNL
According to a press release by the Press Information Bureau, revival measures approved by the Cabinet focus on 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 BSNL.
In upgrading the BSNL services, the government will focus on administrative allotment of the spectrum, financial support for capital expenditure, viability gap funding for rural wireline operations, and an increase in the authorized capital of the public sector telecom giant.
To improve existing services and provide 4G services, BSNL will be allotted Spectrum in the 900/1800 MHz band administratively at the cost of Rs 44,993 Cr through equity infusion. With this spectrum, BSNL will be able to compete in the market and provide high-speed data using their vast network including in rural areas. To meet the projected capital expenditure for the next 4 years, Government will fund CAPEX of Rs 22,471 Cr.
The government will provide Rs 13,789 Cr to BSNL as viability gap funding for commercially unviable rural wire-line operations done during 2014-15 to 2019-20. This measure will be taken because, despite the commercial non-viability, BSNL has been providing wireline services in rural/remote areas to meet the social objectives of the Government. Besides, the authorized capital of BSNL will be increased from Rs 40,000 Cr to Rs 1,50,000 Cr in lieu of AGR dues, provision of CAPEX, and allotment of spectrum.
For destressing the BSNL balance sheet, the government will restructure the debts, and provide financial support to BSNL for adjusted gross revenue dues, and BSNL will re-issue preference shares of Rs 7,500 crores.
To facilitate wider utilization of infrastructure laid under BharatNet, Bharat Broadband Network Ltd (BBNL) will be merged with BSNL. The infrastructure created under BharatNet will continue to be a national asset, accessible on a non-discriminatory basis to all the Telecom Service Providers.
Saturating 4G mobile services in rural parts of India
According to a press release by the Press Information Bureau, the government has approved a project for saturation of 4G mobile services in uncovered villages across the country. The total cost of this project is Rs 26,136 crores.
The project will provide 4G mobile services in 24,680 uncovered villages in remote and difficult areas. The project has a provision to include 20% additional villages on account of rehabilitation, new settlements, withdrawal of services by existing operators, etc.
In addition, 6,279 villages having only 2G/3G connectivity shall 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. The project cost of Rs. 26,316 Cr includes CAPEX and 5-year operational expenditure.
BSNL is already in process of deployment of the Atmanirbhar 4G technology stack, which will be deployed in this project as well. The project is a significant step toward the vision of the Government to provide mobile connectivity in rural areas. This project will promote the delivery of various e-governance services, banking services, telemedicine, tele-education, etc. through mobile broadband and generate employment in rural areas.
