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Government approves Rs 1.64 lakh crore revival package for BSNL, Check complete details!!

Government approves Rs 1.64 lakh crore revival package for BSNL: The Union Cabinet has approved a Rs 1.64-lakh crore revival package for the government owned Bharat Sanchar Nigam Limited (BSNL), said Ashwini Vaishnaw, the minister for telecom, on July 27. Click here to join telegram study group →

The package will have three main elements –

  • It will aim at improving the quality of BSNL services,
  • It will be used to de-stress the balance sheet
  • It will expand the company’s fiber reach by merging Bharat Broadband Network Limited (BBNL) with it.

Rs 1.64 lakh crore revival package for BSNL Details

#1) The package will include a cash support of Rs 43,964 crore and non-cash support of Rs 1.20 lakh crore.

#2) The revival programme is for a four-year period, but most of it will be implemented in the first two years.

#3) The cash proponent will be used for spectrum allocation, capital expenditure and viability gap funding.

#4) 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.

#5) 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.

#6) BSNL is also in the process of deploying “Atmanirbhar 4G” technology stack. To meet the projected capital expenditure for next 4 years, the government will fund capex of Rs 22,471 crore.

#7) The government will also provide Rs 13,789 crore to BSNL as viability gap funding for commercially unviable rural wire-line operations done during 2014-15 to 2019-20.

#8) The authorized capital of BSNL will be increased from Rs 40,000 crore to Rs 1,50,000 crore in lieu of AGR dues, provision of capex and allotment of spectrum.

#9) To de-stress the balance sheet, the government is approving a sovereign guarantee bond issuance for BSNL to repay the bank loans. The state-run telecom service provider has around Rs 33,000 crore as bank debt.

#10) 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. BSNL will re-issue preference share of Rs 7,500 crore to the government.

#11) There is an element of sovereign guarantee bonds for Mahanagar Telephone Nigam Limited (MTNL), a subsidiary of BSNL, also in the package.

#12) Post the implementation of the revival package, BSNL will be able to expand 4G services to raise ARPU (average revenue per user) to Rs 170-180.

Market Share of BSNL

#13) As on May 31, 2022, the private telecom service providers held 89.87 percent market share of the wireless subscribers, whereas BSNL and MTNL, the two PSU access service providers, had a market share of only 10.13 percent.

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