India’s cabinet has approved an 890.47 billion rupee ($10.79 billion) revival package for loss-making Bharat Sanchar Nigam (BSNL) to help the state-owned telecom operator deploy 4G and 5G services in a market dominated by private players.
The revival package includes allotment of 4G / 5G spectrum to BSNL through equity infusion. The authorized capital of BSNL will be increased from Rs 1,50,000 crore to Rs 2,10,000 crore. The government said BSNL will emerge as a stable telecom service provider focused on providing connectivity to remotest parts of India with this revival package.
| 700 MHz | 10 MHz paired in 22 LSAs | Rs 46,338 crore |
| 3300 MHz | 70 MHz in 22 LSAs | Rs 26,184 crore |
| 26 GHz | 800 MHz in 21 LSAs and 650 MHz in 1 LSA | Rs 6,564 crore |
| 2500 MHz | 20 MHz in 6 LSAs and 10 MHz in 2 LSAs | Rs 9,428 crore |
BSNL recently partnered with Tata Consultancy Services (TCS), the leading software company, to help deploy 4G network across the country at a time when larger rivals were rolling out next-generation 5G network.
“From the government’s standpoint, BSNL is not just an investment to ensure competition, it is also a sandbox for the indigenisation initiatives that the government has as far as telecom networks are concerned,” said Vivekanand Subbaraman, a telecom analyst at Ambit Capital.
“The investment will help with some of the infrastructure that needs to come up for 5G and for a credible third player to be present in the market.”
Debt-laden BSNL, grappling with poor infrastructure, has been posting losses for the past 12 years. The losses narrowed to 69.82 billion rupees in the year ended March 2022 from 74.41 billion rupees a year ago.
The company has also been struggling to win customers in the face of intense price competition from Reliance Industries-owned Reliance Jio Infocomm, Bharti Airtel and Vodafone Idea.
BSNL/MTNL revivals:
India Government had approved the first revival package for BSNL/MTNL in 2019. It amounted to Rs. 69,000 Crore and brought stability in BSNL/MTNL.
In 2022, India Government approved second revival package for BSNL/MTNL amounting to Rs. 1.64 lakh crore. It provided financial support for Capex, viability gap funding for rural landlines, financial support for de-stressing the balance sheet, and settlement of AGR dues, merger of BBNL with BSNL, etc.
As a result of these two packages, BSNL has started earning operating profits since FY 2021-22. Total debt of BSNL has reduced from Rs 32,944 crore to Rs 22,289 crore.
BSNL has achieved strong growth in home fiber segment. It is providing more than 1 Lakh new connections every month. Total home fiber subscriber base of BSNL in May 2023 is 30.88 Lakh. Total revenue from home fiber last year was Rs. 2,071 Crore.
BSNL has reported operating profit of Rs 1,559 crore and revenue of Rs 20,699 crore in fiscal 2022-23 as compared with Rs 944 crore and Rs 19,053 crore in 2021-22 and Rs 1,177 crore and Rs 18,595 crore in 2020-21.