Cabinet approves BSNL revival plan, approves BSNL-BBNL merger
The Union Cabinet on Wednesday approved a massive package of Rs.1.64 lakh crore for the revival of state-owned telecom firm BSNL. The revival measures approved by the Cabinet meeting chaired by Prime Minister Narendra Modi include 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.
Briefing media on the decision taken by the Union Cabinet, Telecom Minister Ashwini Vaishnaw said the package has a cash component of Rs.43,964 crore and a non-cash component of Rs.1.2 lakh crore spread over four years. The government will make administrative allocation of spectrum BSNL needs to offer 4G services. The allocation of spectrum in the 900/ 1800 MHz band at the cost of Rs.44,993 crore would be through equity infusion.
The Minister said to meet the projected capital expenditure for the next four years, the government will fund Capex with Rs.22,471 crore for developing a 4G technology stack. Also, the government will provide Rs.13,789 crore to BSNL as viability-gap funding for commercially unviable rural wireline operations done during 2014-15 to 2019-20. To de-stress the balance sheet, Rs.33,404 crore statutory dues will be converted into equity. Besides, the government will provide a sovereign guarantee for raising money to repay current loans, he said.
Vaishnaw said to facilitate wider utilization of infrastructure laid under BharatNet, BBNL will be merged with BSNL. The infrastructure created under BharatNet will continue to be a national asset, accessible on a non-discriminatory basis to all the Telecom Service Providers. The Minister said the Union Cabinet also approved a project for saturation of 4G mobile services in uncovered villages across the country at a total cost of Rs.26,316 crore. The project will provide 4G mobile services in 24,680 uncovered villages in remote and difficult areas, he said.
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