NEW DELHI: In a bid to revive the ailing telecom firm BSNL, the government on Wednesday approved its merger with Bharat Broadband Network Ltd (BBNL).
The Union Cabinet approved a revival package of Rs 1.64 lakh crore, telecom minister Ashwini Vaishnaw said. The package has a cash component of Rs 43,964 crore and a non-cash component of Rs 1.2 lakh crore spread over 4 years.
Briefing reporters on the decision taken by the Union Cabinet, he said the government will make administrative allocation of spectrum BSNL needs to offer 4G services. The allocation of spectrum in 900/1800 MHz band at the cost of Rs 44,993 crore would be through equity infusion.
The package has three elements — to improve services, de-stress balance sheet and expansion of fibre network.
To de-stress the balance sheet, Rs 33,404 crore statutory dues will be converted into equity, Vaishnaw said.
Besides, the government will provide sovereign guarantee for raising money to repay current loans, he added.
The government will also provide Rs 13,789 crore to BSNL as viability-gap funding for commercially unviable rural wireline operations done during 2014-15 to 2019-20.
(With PTI inputs)