New Delhi: The Union Cabinet on Wednesday approved a third revival package of Rs 89,047 crore for Bharat Sanchar Nigam Limited (BSNL), taking the total amount infused into the ailing public sector telco in the past five years to nearly Rs 3.22 lakh crore.
The latest package, primarily meant for allocation 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 formally under various connectivity projects.
As part of its revival strategy for BSNL, the cabinet had approved the first revival package of Rs 69,000 crore for the telco in 2019, followed by a second lifeline of Rs 1.64 lakh crore in 2022.
“The first and second packages brought BSNL from a very difficult situation to a stable one. Now the time has come when BSNL should be in the league of major players. It should become a player that brings 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 weakest. With that thought process, the cabinet today approved a package of Rs 89,047,” Union Communications Minister Ashwini Vaishnav said at a press conference in Delhi.
He further said that due to 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.
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‘BSNL likely to become debt free in three years’
Under the third revival package, BSNL will be allotted spectrum worth Rs 89,047.82 crore in the premium 700 MHz, 3300 MHz bands, 26 GHz bands and 2500 MHz bands. All these spectrum bands can be used to offer 4G and 5G services.
“BSNL has now become an operating profit generating company. It has reduced its debt by about Rs 10,500 crore. It is likely to become a debt-free company in three years.
The minister highlighted that as a result of the last two packages, BSNL started earning operational profits. According to official data, the company’s revenue is expected to increase 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 projects 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.
BSNL’s total debt reduced to Rs. According to the figures, Rs 32,944 crore to Rs 22,289 crore.
Vaishnav said that the authorized capital of BSNL would be increased from Rs 1,50,000 crore to Rs 2,10,000 crore. Authorized capital is the maximum amount of capital for which shares can be issued by the company to the shareholders.
“With these measures, BSNL will be able to roll out 4G services and 5G to its customers across India. The company still has a lot of trust in rural areas. There was a time when BSNL was the first choice of telecom users… Only by providing good services can you win customers.
(Edited by Gitanjali Das)
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