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India Bridging the Digital Divide with Nationwide 4G/5G Services

The Union Cabinet, chaired by Prime Minister Narendra Modi, has approved the third revival package for the Bharat Sanchar Nigam Limited (BSNL), which encompasses the provision of 4G/5G spectrum through equity infusion. The package for BSNL amounts to a total of IN 890.47 billion (around US$ 10.7 billion), according to a press release. BSNL is a central public sector undertaking (CPSU) headquartered in New Delhi. It operates under the Department of Telecommunications.

The authorised capital of BSNL will be increased from IN 1.5 trillion (US$ 18 billion) to IN 2.1 trillion (US$ 29.4 billion). The revival package will enable BSNL to become a stable telecommunication service provider with a primary focus on delivering connectivity to the most remote regions of India.

The spectrum allotment for BSNL brings a range of benefits and opportunities for the company. With this allocation, BSNL will be able to offer nationwide 4G and 5G services, bridging the digital divide in the country. It will enable BSNL to extend 4G coverage to remote villages as part of various connectivity initiatives. Additionally, the company will be able to provide Fixed Wireless Access (FWA) services, delivering high-speed internet connectivity. Moreover, BSNL will have the capacity to offer services and spectrum for Captive Non-Public Networks (CNPN), catering to specific organisational needs.

In 2019, the government gave its approval for the initial revival package for BSNL/MTNL. The package amounted to IN 690 billion (US$ 8.3 billion) and played a significant role in addressing the challenges faced by BSNL/MTNL, ensuring the stability and continuity of operations.

In 2022, the government approved the second revival package for BSNL/MTNL, which amounted to IN 1.64 trillion (US$ 19.8 billion) and encompassed various provisions to strengthen their financial position and operational capabilities. The package included financial support for capital expenditure (capex), viability gap funding for rural landline services, financial support for de-stressing the balance sheet, and the settlement of Adjusted Gross Revenue (AGR) dues. Additionally, the merger of Bharat Broadband Network Limited (BBNL) with BSNL was also part of the package, aiming to optimise resources and improve overall efficiency.

As a result of the two revival packages, BSNL has experienced a positive turnaround in its financial performance. Starting from the fiscal year 2021-22, BSNL has managed to generate operating profits, marking a significant achievement. Furthermore, the total debt of BSNL has reduced from IN 329.44 billion (US$ 3.9 billion) to IN 222.89 billion (US$ 2.6 billion).

BSNL has witnessed remarkable growth in the home fibre segment, with a consistent increase in new connections. Currently, BSNL is adding over 100,000 new connections each month. As of May 2023, the total home fibre subscriber base of BSNL stands at 3.088 million. The revenue generated from home fibre services last year amounted to IN 20.71 billion (US$ 250 million).

Telecom technology is a critical domain with only a few global providers offering end-to-end solutions. In line with the Prime Minister’s vision, India has successfully developed its own 4G/5G technology stack. The deployment of this indigenous technology has already commenced, and after a few months of field deployment, it will be swiftly rolled out nationwide on the BSNL network.


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