BSNL financial crisis seeks Empowering India with Next-Gen Networks – Seeking Sovereign Guarantee for a Rs 40,000 Crore Leap


BSNL financial crisis: This financial infusion aims to alleviate debt and support capital expenditure (capex) essential for the rollout of cutting-edge ‘made in India’ next-generation networks. The ongoing pandemic has caused a slowdown in the land monetization process, prompting BSNL Chairman Pravin K Purwar to advocate for a yearly sovereign guarantee until the process gains momentum.

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In a candid discussion with ET, Purwar expressed the challenges faced in the land monetization process due to the Covid-19 pandemic and underscored the necessity for a sovereign guarantee to bolster financial stability. The chairman, who recently received a one-year extension to oversee Mahanagar Telephone Nigam Ltd (MTNL)

BSNL financial crisis

Those who have had online connections from BSNL for many years remain their customers. However, BSNL continues to stumble, unable to face private competition.

It was emphasized that BSNL requires Rs 20,000 crore for capital expenditure and a similar amount to repay its debt in the next three years.
Purwar highlighted the urgency of financial support, seeking Rs 17,500 crore for capital expenditure and Rs 19,605 crore for debt repayment between the current fiscal year and FY2024. It is noteworthy that BSNL had earlier raised Rs 8,500 crore through Sovereign Guaranteed Bond in September 2020.

However, the anticipated monetization of land assets worth around Rs 20,000 crore did not succeed, bringing the total debt liabilities of the telecom giant to around Rs 30,000 crore.

BSNL, aligning with the government’s drive to promote Indian technology, faces a unique challenge in deploying indigenous technology not utilized elsewhere. Purwar emphasized that this presents a business risk, underscoring the importance of sufficient funds to meet upcoming expenses.

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To advance its technological infrastructure, BSNL is targeting Rs 12,500 crore for deploying 100,000 indigenously developed sites and an additional Rs 5,000 crore for transmission network equipment, fabrication, and IT infrastructure

Private sector giants such as Reliance Jio, Bharti Airtel and Vodafone Idea.

As of July, BSNL claimed more than 115 million mobile phone users and achieved a 10% revenue market share in a competitive mobile telephony market dominated by private sector giants such as Reliance Jio, Bharti Airtel and Vodafone Idea.

Facing controversies in its 4G expansion tender, BSNL is now piloting the deployment of homegrown equipment, aiming to launch commercial 4G services


Tata Consultancy Services

A consortium led by Tata Consultancy Services (TCS), including the Center for Development of Telematics (C-DoT) and Bengaluru-based Tejas Networks, is actively deploying India’s first indigenous network for BSNL.

C-DoT, in collaboration with Tejas Networks and TCS, is rigorously testing its core network and radio equipment, showcasing India’s strides in telecom technology in Ambala and Chandigarh.

Bharat Sanchar Nigam Limited (BSNL)

Bharat Sanchar Nigam Limited (BSNL) stands as a stalwart in India’s telecommunications landscape, playing a pivotal role in connecting millions across the nation. Established in 2000, BSNL is a state-owned telecommunications company with a rich legacy of providing affordable and reliable services. With a diverse range of offerings, including landline, broadband, and mobile services, BSNL has been a lifeline for rural and urban communities alike.

BSNL has consistently strived to stay ahead in the rapidly evolving telecom industry. Despite facing challenges, the company has embraced innovation, recently focusing on the deployment of ‘made in India’ next-generation networks. The ongoing pursuit of technological advancements is reflected in BSNL’s ambitious plans to invest in indigenous infrastructure, seeking a sovereign guarantee to raise around Rs 40,000 crore for debt reduction and capital expenditure.

Boasting a subscriber base exceeding 115 million mobile users and a 10% revenue market share, BSNL holds a significant position in the highly competitive telecom market. The company’s commitment to promoting Indian technology, coupled with its endeavours in deploying homegrown equipment for 4G services, signals a promising future as BSNL continues to play a vital role in connecting and empowering the people of India.

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