The Department of Telecommunications (DoT) may offer the struggling public sector telecom provider Bharat Sachar Nigam Limited (BSNL) a massive Rs 13,000 crore bailout package. The BSNL's financial situation is so bad that it has failed to pay the 1.76 lakh employees their February salary while there are reports even the March pay may be delayed.
The DoT proposal, which is in the final stages of deliberation, may include the allocation of 4G spectrum allotment through Rs 6,767 crore equity infusion, a long-standing BSNL demand amid intense competition with private telcos that have been offering pure-play 4G service.
The DoT package may also include Rs 6,365 crore voluntary retirement package, and monetisation of real estate assets. The state-owned BSNL that was a monopoly operator across much of the nation has extensive real estate assets in almost all cities and villages that are worth in thousands of crores.
The package is being considered as banks are reportedly reluctant to give even short term loans to the BSNL, DoT sources said. The company's losses in FY'19 are likely to be top Rs 7,000 crore, including Rs 4,000 crore in operational costs account. The company reported Rs 8,000 crore loss in FY18, compared to Rs 4,786 crore in the previous financial year. Its losses are showing no signs of tapering off, a report says.
Though DoT had approved the BSNL's request for 4G spectrum in the 2100 Mhz band to launch fourth-generation (4G) services across the country, it is yet to get the Union Cabinet's nod. The BSNL in 2017 submitted a detailed project report for acquiring spectrum worth about Rs 13,885 crore, seeking Rs 6,652 crore as equity infusion from the government.
The BSNL has got 16 years to pay for the spectrum after the Telecom Commission, the highest telecom policy-making body, extended the duration for spectrum payments to 16 years from 10 following an inter-ministerial group's (IMG) recommendation. "The telecom department has accepted our proposal and is in the process to allow the spectrum in the 2100 Mhz band to run 4G services," BSNL chairman and managing director Anupam Shrivastava told ETTelecom last month. He expressed the hope that the telco would be able to launch high-speed Long-Term Evolution (LTE) services soon. LTE is the contemporary technology standard for high-speed wireless communication services for mobile devices.
Employees unions say the BSNL should have already launched 4G services, considering the nation is getting ready to move on to 5G later this year. The BSNL's efforts to compete with market leader Vodafone Idea, second-placed Bharti Airtel and aggressive Reliance Jio have been hobbled by its failure to provide 4G services. They blame Prime Minister Narendra Modi government's bias favouring private players for the delay in decision making.
Shrivastava had said that the telco was planning to roll out 4G services on the 2100 Mhz band in all 21 licensed service areas (LSA) except Rajasthan where it held airwaves in the 800 MHz range. "We have already rolled out 4G in Kerala and Karnataka on a pilot basis and can concurrently run 3G and 4G services if an additional 5 Mhz is allocated in the 2100Mhz band," the report quoted Shrivastava as saying.