The government approved the merger of ailing telecom company BSNL (Bharat Sanchar Nigam Limited) with BBNL (Bharat Broadband Network Ltd) on Wednesday. As per telecom minister Ashwini Vaishnaw, the Union Cabinet sanctioned Rs 1.64 Lakh Crore as a revival package for BSNL. The package includes Rs 43, 964 Crore as a cash component and 1.2 Lakh Crore as a non-cash component for 4 years.
While briefing reporters on the government’s decision, Ashwini Vaishnaw said the government would allocate spectrum to BSNL so that it can offer 4G services. The allocation of spectrum costing Rs 44 993 Crore would be done through equity infusion.
The approved package for BSNL has three elements – to enhance services, wind down the balance sheet and fibre network development. Moreover, Ashwini said that the statutory due of Rs 33, 404 Crore would be converted into equity.
Apart from this, the government will provide sovereign security for raising funds to reimburse the existing loans, Ashwini added. The government will also give Rs 13, 789 Crore to BSNL as a viability-gap capital allotment for commercially hopeless rural wireline operations done during 2014-15 to 2019-20.