The Union Cabinet on Wednesday approved a Rs. 1.64 lakh crore package for the revival of state-owned telecom firm BSNL, Telecom Minister Ashwini Vaishnaw said.
The package has three elements – to improve services, de-stress balance sheet, and expansion of fibre network.
Briefing reporters on the decision taken by the Union Cabinet, he said the government will make administrative allocation of spectrum BSNL needs to offer 4G services.
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To de-stress the balance sheet, Rs. 33,000 crore statutory dues will be converted into equity and a similar amount of bank loans will be repaid through the issue of low-interest bonds.
Also, BBNL will be merged with BSNL, he added.
The move aims at helping the loss-making firm compete better with private rivals.
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The firm has struggled to win customers as Reliance Industries’ telecoms arm Jio and rivals Bharti Airtel and Vodafone Idea have rolled out 4G services and aggressively cut data prices.
Meanwhile, firms run by tycoons Mukesh Ambani, Sunil Bharti Mittal, and Gautam Adani have recently bid about Rs. 1.45 lakh crore to buy fifth-generation (5G) airwaves. The private companies placed their bid on the opening day of India’s largest-ever spectrum auction on Tuesday.
According to Telecom Minister Ashwini Vaishnaw, the response on the first day of the auction exceeded all expectations and will surpass the records of 2015, when revenue collection from auction stood at Rs. 1.09 lakh crore.
Even the 700MHz band, which had not seen any takers in the 2016 and 2021 auctions, received bids this time. As per information put out by the telecom department, in the coveted 700MHz band, provisional bids worth Rs. 39,270 crore were received on day-one of auction, industry watchers said.