Govt greenlights BSNL/BBNL merger as part of USD20.5bn revival package

28 Jul 2022

The Indian government has approved a INR1.64 trillion (USD20.5 billion) revival programme for state-owned telco Bharat Sanchar Nigam Limited (BSNL). Telegraph India cites Telecom Minister Ashwini Vaishnaw as saying that the package comprises a cash component of INR439.6 billion and a non-cash component of INR1.2 trillion spread over four years. The revival plan includes the merger of BSNL with Bharat Broadband Network Limited (BBNL), the special purpose vehicle established to manage and operate the government’s national fibre network (known as BharatNet), which now spans 580,491km and connects over 185,000 gram panchayats (GPs, a village-level administrative division). The merger of the two entities was proposed earlier this year in the hope that combining the operators would generate synergies that would improve utilisation of BBNL’s network and enable both companies to decrease costs. However, critics of the plan have highlighted the fact that both BSNL and BBNL suffer from many of the same problems, including poor coordination with other agencies, operational inefficiency and procurement difficulties. Addressing complaints regarding the change of BBNL’s status as a neutral infrastructure provider, the telecom minister stated that BharatNet would continue to be accessible on a non-discriminatory basis to all telecom service providers.

Meanwhile, the government’s funding will also provide around INR450.0 billion to support the operator’s long-delayed acquisition of 4G spectrum and a further INR224.7 billion for 4G network equipment. The cabinet also greenlit a INR263.2 billion project for the deployment of 4G services to unserved villages across the country. BSNL will also convert statutory dues totalling INR334.0 billion into government equity to de-stress its balance sheet.

India, Bharat Broadband Network Limited (BBNL), Bharat Sanchar Nigam Limited (BSNL)