Union Cabinet approves BSNL revival plan worth Rs 1.64 trillion

The Union Cabinet on Wednesday cleared a Rs 1.64-trillion package for Bharat Sanchar Nigam Ltd (BSNL) as part of a four-year turnaround plan. The package includes a mix of financial support, debt restructuring, viability-gap funding, and administrative allotment of spectrum, which may help the state-owned telecom service provider to de-stress its balance sheet, improve landline network, and launch 4G service.

“It is expected that with the implementation of this revival plan, BSNL will turn around and earn profit in FY2026-27,” Telecom Minister Ashwini Vaishnaw said.

The Cabinet also approved the merger of Bharat Broadband Network Limited (BBNL), a government-owned special purpose vehicle, with BSNL to boost the latter’s infrastructure and support its telephony services. Besides, a Rs 26, 316-crore scheme for providing 4G mobile coverage to over 30,000 villages, using indigenously developed 4G technology stack, was cleared.

This is the second revival package sanctioned by the government in three years after a Rs 69,000-crore plan in 2019, which included equity infusion, asset monetisation, the merger of BSNL with MTNL, and a voluntary retirement scheme.

BSNL has been saddled with steep losses (over Rs 50,000 crore in the past five years) and obsolete technology, resulting in a decline in revenues and customers. Vaishnaw, however, defended the government’s move as conscious and consistent with its objective of maintaining a healthy public sector unit in a strategic sector.

“BSNL is a big turnaround story. It has made an operating profit. Customer attrition has stopped and its market share is stable at 10 per cent. That is giving us hope and confidence. Net profit will be made once revenue improves and the balance sheet is restructured,” the minister said.

Vaishnaw said the package had a cash component of around Rs 44,000 crore while the remainder Rs 1.2-odd trillion was of non-cash nature. He added 80 per cent of allocations would be done in two years.

Citing global trends, he said 4G service would continue to have a significant customer base load for the next 7-8 years, allowing BSNL to build its business. He stated that BSNL would be held responsible for clear well-defined goals and outcomes with regard to service quality improvements, revenue growth, and cost reduction.

Explaining the progress of the 2019 plan, a senior government official said over 92,000 BSNL and MTNL employees took VRS, leading to the wage bill reduction of two companies by 50 and 75 per cent, respectively.

The 2019 package too had provided Rs 24,000 crore for 4G service but that could not be allocated earlier as BSNL was not ready with technology. The company has faced difficulties in land monetisation but is making headway by raising funds of over Rs 1,400 crore annually through leasing of fiber and rentals.

“In essence only the 4G-related components in the 2019 package could not take off. There has been substantive development in the rest,” the official added.