Cabinet approves revival package of Rs 89,047 crore for BSNL
BSNL, struggling with poor infrastructure, has been battered by intense competition from Jio, the wireless arm of Reliance Industries, Bharti Airtel and Vodafone Idea which have rolled out 4G services at low prices on voice calls and data.
In a significant move, the Union Cabinet chaired by Prime Minister Narendra Modi on Wednesday approved the third revival package for BSNL with a total outlay of Rs. 89,047 crores.
The government approved the first revival package for BSNL/MTNL in 2019. It amounted to Rs. 69,000 Crore and brought stability to BSNL/MTNL. The authorized capital of BSNL will be increased from Rs. 1,50,000 crore to Rs. 2,10,000 crore.
In 2022, Government approved a 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. The total debt of BSNL has reduced from Rs. 32,944 Crore to Rs. 22,289 Crore
More from IndiaBSNL, struggling with poor infrastructure, has been battered by intense competition from Jio, the wireless arm of Reliance Industries, Bharti Airtel and Vodafone Idea which have rolled out 4G services at low prices on voice calls and data.
The development comes days after BSNL partnered with top software company Tata Consultancy Services to help deploy a 4G network across the country at a time when larger rivals were rolling out next-generation 5G networks.
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 (BRTI.NS) and Vodafone Idea.
The telecom market in India was upended by Jio's launch in 2016, when it offered free calls and cut-price data plans, eroding the profit and revenue of rivals and leading to consolidation.
Shares of state-owned telecom firm Mahanagar Telephone Nigam Ltd surged 14.3 per cent after the news of a revival package for BSNL.
With inputs from Reuters
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