Govt Approves Rs 6,000 Cr Package For BSNL, MTNL: Can It Revive Their Fortunes?

Bharat Sanchar Nigam Ltd (BSNL), the ailing state-owned telecom firm, has reportedly received yet another revival package from the Modi government for its 4G rollout. The reported move has pushed shares of its subsidiary, Mahanagar Telephone Nigam Ltd (MTNL), up by as much as 10%. 

Although no public announcement has been made, several reports citing sources said that the Union Cabinet approved Rs 6,000 crore in funding for the two state-owned telecom firms last week to help them expand their 4G infrastructure. 

To compete with Airtel, Reliance Jio, and Vi, BSNL plans to deploy 100,000 4G sites on a pan-India basis, for which it reportedly required Rs 19,000 crore. Reports say it has already received Rs 13,000 crore and was seeking an additional Rs 6,000 crore from the Department of Telecommunications (DoT). 

BSNL and MTNL Revival Plan 

As per publicly available data, the Indian government has infused over Rs 3.23 lakh crore to revive BSNL and MTNL through three separate packages.

The 2019 package worth Rs 70,000 crore focused on reducing employee costs through a voluntary retirement scheme (VRS), restructuring debt with sovereign guarantee bonds, and monetising assets. The 2022 package worth Rs 1.64 lakh crore aimed at upgrading BSNL's services, allocating spectrum, and merging Bharat Broadband Nigam Ltd (BBNL) with BSNL to expand its fibre network.

The government also infused fresh capital to de-stress its balance sheet and improve infrastructure. In 2023, the government provided a Rs 89,047 crore package, which included the allotment of 4G/5G spectrum through equity infusion. 

In 2023, Tata Consultancy Services (TCS) secured a Rs 15,000 crore contract from BSNL to deploy India's first indigenous 4G network. The order was delayed by at least two years due to prolonged proof-of-concept studies and contract negotiations. 

As private telecom operators in India advance with 5G deployments, BSNL's 4G network remains limited. 

Later, in September 2024, the two entities signed an MoU to provide "synergy of operations between MTNL and BSNL in order to provide pan-India telecom services."