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BSNL, MTNL get sovereign guarantee for ₹15,000 crore bonds

Rajesh Kurup Mumbai | Updated on July 11, 2020 Published on July 11, 2020

File photo   -  KVS. Giri

BSNL unions call for “black flag” demonstrations on Thursday

State-owned Bharat Sanchar Nigam (BSNL) and Mahanagar Telephone Nigam (MTNL) have received a sovereign guarantee from the Department of Economic Affairs (DEA), Ministry of Finance, to issue long-term bonds of ₹15,000 crore.

The Department of Telecommunications (DoT) had sought the sovereign guarantee of ₹15,000 crore (₹8,500 crore to BSNL and ₹6,500 crore to MTNL) for restructuring their existing debts and launching 4G services, sources close to the development told BusinessLine.

The PSUs will have to pay one per cent guarantee fee to the Government (fee charged for domestic borrowings). The rate of guarantee fee would be applicable for the outstanding amount at the beginning of the year.

The Government will cover the principal amount and the normal interest, while DoT will review proper utilisation of guaranteed funds and also ensure that there is no risk of default.

In case of default, the lending agency will invoke the guarantee within 60 days.

AUAB Moves DOT

Meanwhile, All Unions and Associations of BSNL (AUAB) has moved DoT seeking immediate rollout of 4G services, following the cancellation of 4G tenders.

Earlier last week, BSNL and MTNL cancelled tenders issued for the upgradation of 4G network across various circles.

READ THE STORY: BSNL, MTNL cancel 4G network upgradation tenders

In its letter to DoT Secretary, AUAB stated that BSNL should take immediate actions to upgrade 49,300 Base Transceiver Stations (BTSs) for 4G services. The upgradation can be done with “minor investments” and time period of two-three months.

The PSU should also add 4G equipment and a tender should be issued immediately.

“In the matter of procuring new equipment and upgradation, there should not be any discrimination, between BSNL and other private telecom service providers,” it said.

The umbrella association for all unions also sought immediate implementation of BSNL’s revival package, urgent measures to improve quality of services and salary payment on the last working day of every month among others. BSNL is yet to pay June salary.

The BSNL unions would also be organising ‘black flag’ demonstrations during lunch hour on July 16, against the cancellation of BSNL's 4G tender and delay in rolling out of 4G services.

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Published on July 11, 2020
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