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Ailing BSNL gets its 3rd revival package. Rs 89,047 cr allotted, focus on 4G & 5G services

New Delhi: The Union Cabinet Wednesday approved its third revival package, worth Rs 89,047 crore, for Bharat Sanchar Nigam Limited (BSNL), bringing the total sum pumped into the ailing public sector telco to around Rs 3.22 lakh crore in the last five years.

The latest package, meant primarily for allotment of 4G and 5G spectrum to BSNL through equity infusion, is expected to help the carrier compete with private telcos by offering pan-India 4G and 5G services, especially 4G coverage in villages under various connectivity projects.

As part of its revival strategy for BSNL, the Cabinet had in 2019 approved the first revival package worth Rs 69,000 crore for the telco, followed by a second lifeline of Rs 1.64 lakh crore in 2022.                           

“The first and second packages brought BSNL out of a very difficult situation to a stable situation. Now time has come when BSNL should be in the league of major players. It should become a player which should bring connectivity to places where normal commercial companies would not be able to. It should be able to provide Digital India services to the weakest of the weak sections. With that thought process, the cabinet today approved a package of Rs 89,047,” Union Minister for Communications Ashwini Vaishnaw said at a press conference in Delhi.

He further said that because of the first revival package, BSNL became a stable entity, while the primary objective of the second revival package was to repair its balance sheet, bring in fresh equity and new technology.

Also Read: TCS receives over Rs 150 billion contract from BSNL to deploy 4G network across India

‘BSNL likely to be debt-free in 3 yrs’

Under the third revival package, BSNL will be allotted spectrum worth Rs 89,047.82 crore in the premium 700 MHz, 3300 MHz band, 26 GHz band and 2500 MHz band. All these spectrum bands can be used for offering 4G and 5G services.

“BSNL has now become an operating profit generating company. It has reduced its debt by almost Rs 10,500 crore. In three years, it is likely to become a debt-free company,” the Vaishnaw said.

The minister highlighted that as a result of the two previous packages, BSNL started earning operating profits. According to official data, the company’s revenues grew from Rs 18,595 crore in 2020-21, to Rs 19,053 crore in 2021-22, and Rs 20,699 crore in 2022-23. Meanwhile, it posted an operating profit of Rs 1,177 crore in 2020-21, Rs 944 crore in 2021-22 and Rs 1,559 crore in 2022-23. Operating profit is a company’s total earnings from its core business, excluding the deduction of interest and taxes.

The total debt of BSNL has reduced to Rs. 22,289 crore from Rs 32,944 crore, according to the data.

The authorised capital of BSNL would be increased from Rs 1,50,000 crore to Rs 2,10,000 crore, said Vaishnaw. Authorised capital is the maximum amount of capital for which shares can be issued by the company to shareholders.

“With these measures, BSNL will be able to roll out 4G services and 5G to its customers pan India. The company still has a lot of trust in rural areas. There was a period when BSNL was the first choice of telecom users… only by giving good services, you can win subscribers,” the Union minister said in response to a query on BSNL’s falling subscriber base.

(Edited by Gitanjali Das)

Also Read: Understatement to say financial health of telcos has improved: Cellular Operators Association of India

Source: The Print

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