The Centre on Wednesday approved yet another revival package for State-owned Bharat Sanchar Nigam Ltd (BSNL) after 2019— this time to the tune of a whopping ₹1.64-lakh crore, to be utilised over the next four years.

The measures focus on fresh capital for upgrading services, allocating spectrum, de-stressing its balance sheet and augmenting its fiber network by merging Bharat Broadband Nigam Ltd (BBNL) with BSNL.

“After the first revival package in 2019, BSNL has become a stable organisation and has now started generating revenue of around ₹19,000 crore and operating cost of ₹18,000 crore. So, it has been brought to an operating profit of around ₹1,000 crore now. From here, to make it sustainable and a vibrant telecom player, the new package has been announced,” said Ashwini Vaishnaw, Minister of Communications and Information Technology.

Speaking to reporters after the Cabinet decisions, he said the package has a cash component of ₹43,964 crore and a non-cash component of ₹1.20-lakh crore. To improve the existing services and provide 4G services, BSNL will be allotted spectrum in 900/1800 MHz band administratively at ₹44,993 crore through equity infusion. Similarly, to promote indigenous technology development, BSNL is in the process of deploying Aatmanirbhar 4G technology stack, said a statement.

Destressing balance sheet

To meet the projected capital expenditure for next four years, the government will fund capex of ₹22,471 core and it will also provide ₹13,789 crore to BSNL as viability gap funding for commercially unviable rural wire-line operations done from 2014-15 to 2019-20. The authorised capital of the company will also be increased from ₹40,000 crore to ₹1.50-lakh crore in lieu of average gross revenue (AGR) dues, provision of capex and allotment of spectrum, the statement said.

To de-stress BSNL’s balance sheet, the government will also provide sovereign guarantee to PSUs for raising long-term loan. They will be able to raise long-term bonds for ₹40,399 crore, which will help in restructuring existing debt and de-stressing balance sheets.

“AGR dues of BSNL amounting to ₹33,404 crore will be settled by conversion into equity. The government will provide funds to BSNL for settling the AGR/GST dues ... BSNL will re-issue preference share of ₹7,500 crore to the government,” the statement added.

On job creation, Vaishnaw said, “Significant amount of employment will be generated by these packages ... even on conservative basis, if BSNL has to connect 35,000 through its stack of network ... we are expecting about 1-lakh employment generation.” Whether those employees will be on payroll or contract, is up to BSNL to decide, the minister added.

‘Growth opportunity’

Welcoming the decision, PK Purwar, Chairman and Managing Director, BSNL, told BusinessLine, “It is a realistic approach ... our intent is to increase our customer base in rural areas from where we get only around ₹3,000 crore currently (from the total of around ₹19,000-crore revenue). We did not have investment opportunity ... who would buy 2G/3G services? But, now we can have a sustainable growth opportunity.”

In the last revival package of October 2019, the government had sanctioned ₹69,000 crore, in which it had envisaged an operating profit of ₹7,500 crore by 2021-22. It had included a voluntary retirement scheme for which half of the 1,53,000 employees working at BSNL had opted.

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