BSNL Looking for Rs. 37,105 Cr. from Govt for Capex, Debt

According to a Financial Express report on Thursday, BSNL has asked the government for an extra Rs. 37,105 crore either as a grant or equity.

BSNL Seeks Cash from Govt

The state-run telco has sought the grant to address its low capex spending and mounting debt servicing obligations. In a letter to outgoing DoT secy Anshu Prakash, BSNL CMD PK Purwar said the telco needs to invest Rs 17,500 crore in capex between FY22 and FY24; during the same time, it needs Rs. 19,605 crore towards servicing debt obligations.

BSNL has become EBITDA positive in FY21, per Purwar. However, he said that the telco has struggled in the face of “hypercompetitive telecom market”. What's more, the state-run telco's 4G still remains a work in progress.

Along similar lines, Purwar added that the telco aims to install 1 lakh homegrown sites for its 4G network. This will need a capex of Rs. 12,500 crore; the telco further requires an additional Rs. 5,000 crore for transmission network, fiberization, IT systems, and relevant infrastructure. He also added a staggered capex structure in the letter, saying that the telco needs "approximately Rs 5,000 crore in current fiscal, Rs 7,500 crore in FY23 and Rs 5,000 crore in FY24".

Last month, the C-DoT-led consortium, which included TCS and Tejas Networks, won the race to deploy the country’s first indigenous 4G network for BSNL. Furthermore, the consortium had said that it also will upgrade the BSNL 4G to 5G NSA by the end of 2022, and to 5G SA in 2023.

The central government has already supported BSNL on multiple occasions over the past. In 2019, the Center had invested Rs. 69,000 crore revival package for it, and MTNL. Also, the government has further provided an aid worth Rs. 23,814 crore for letting BSNL and MTNL acquire 4G spectrum.

However, BSNL has tried to sort its problems on its own as well; last year, it had raised more than Rs. 8,500 crore through sovereign guarantee bonds. Along with this, the two PSU telcos will seek to monetize their assets worth Rs. 38,000 crore over a 4-year period.

This fiscal, the telco's total income stood at Rs. 18,595 crore, down 2% Y-o-Y. In some positive news, the telco has reduced its Rs. 7,441 crore this fiscal, as it has managed to reduce its staff by 78,500. Alongside staff layoffs, BSNL has implemented the Voluntary Retirement Scheme, reducing employee costs by Rs. 7,000 crore. Lastly, the state-run telco managed to reduce administrative and operating expenses in the last two years by about Rs 2,500 crore.