BSNL is not finished. Government approves Rs 1.64 lakh crore package, other measures to revive telecom PSU

With the major telecom companies contesting to get the 5G spectrum, we had all but forgotten about BSNL. But, the almost-dead telecom PSU got a huge boost as the government approved Rs 1.64 lakh crore package for its revival.

The revival measures approved by the Cabinet focus on infusing fresh capital for upgrading services, allocating spectrum, de-stressing its balance sheet, and augmenting its fibre network.

Bharat Broadband Network Ltd (BBNL), which started a fibre network called BharatNet, will be merged with BSNL to boost its infrastructure and technology, said Telecom and IT Minister Ashwini Vaishnaw.

"We are committed to strengthening  Bharat Sanchar Nigam Limited," he said.

Here is how the government is planning on upgrading BSNL services:

Allotment of spectrum: To improve existing services and provide 4G services, BSNL will be allotted spectrum in 900/1800 mhz band administratively at the cost of Rs 44,993 crore 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.

Financial support: To promote indigenous technology development, BSNL is in process of deploying 4G technology stack. To meet the projected capital expenditure for next 4 years, the government will fund capex of Rs 22,471 crore.

Funding for rural/remote operations: Despite the commercial non-viability, BSNL has been providing wireline services in rural/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.

Increase in authorised capital: The authorised capital of BSNL will be increased from Rs 40,000 crore to Rs 1,50,000 crore.

Not only that, the government also plans to de-stress BSNL's balance sheet:

Debt structuring: Government will provide sovereign guarantee for raising long term loans. BSNL and other PSUs will be able to raise long term bonds for an amount of Rs 40,399 crore.

Financial support for AGR dues: To further improve the balance sheet, Adjusted Gross Revenue (AGR) dues of BSNL amounting to Rs 33,404 crore will be settled by conversion into equity. Government will provide funds to BSNL for settling the AGR/GST dues.

With these measures, the government is expecting that the BSNL will be able to improve the quality of existing services, roll out 4G services and become financially viable. The telecom ministry is expecting that with this revival plan, BSNL will turn-around and earn profit in FY 2026-27.