Explained: Three reasons why a revival package for BSNL was cleared | Explained News,The Indian Express
The government has cleared a Rs 1.64 lakh crore package to revive telecom company Bharat Sanchar Nigam Ltd (BSNL). Why is the government infusing money into a loss-making company? What are the key aspects of the package?
The government Wednesday cleared a Rs 1.64 lakh crore booster shot for state-owned loss-making telecom company Bharat Sanchar Nigam Ltd (BSNL), with an aim to upgrade the operator’s network to 4G while de-stressing its balance sheet. The four-year turnaround plan includes both a cash component and a non-cash component.
The package has three main focus areas. The government will focus on upgrading BSNL services, wherein the company will be administratively allocated spectrum in the 900 MHz and 1800 MHz frequencies at the cost of Rs 44,993 crore through equity infusion. The government will fund capital expenditure of Rs 22,471 crore for deployment of indigenous 4G stack by the operator, while also providing Rs 13,789 crore as viability gap funding for operating commercially unviable rural wireline operations done between FY15 and FY20.
The telecom department said the Centre will provide sovereign guarantee to BSNL and MTNL for raising long-term loans. They will be able to raise long-term bonds for an amount of Rs 40,399 crore.
To further improve the balance sheet, AGR dues of BSNL amounting to Rs 33,404 crore will be settled by conversion into equity, and the government will provide funds to BSNL for settling the AGR/GST dues.
Further, BSNL will re-issue preference share of Rs 7,500 crore to the government.
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