BSNL may get nod to raise Rs 6,700 crore for voluntary retirement scheme

PSU likely to get 4G spectrum on a revenue-neutral basis

As the department of telecommunications (DoT) finalises the contours of the revival package for Bharat Sanchar Nigam Ltd (BSNL), 4G spectrum allotment on a revenue-neutral basis and bond issue to fund the voluntary retirement scheme (VRS) are being considered. 

The proposals, which are in their final stages, would be sent to the Cabinet for approval soon.

A senior DOT official said, “We have invited comments from all stakeholders and we are in the process of evaluating those comments before finalising the package.”

The central government may allow BSNL to raise funds to the tune of Rs 6,767 crore through a bond issue for financing its retirement package, an official in the know said.

Another official said the 2014 proposal of the group of ministers (GoM) of giving subsidy to BSNL is likely to be considered for the purpose of VRS only. 

In 2016, the Union Cabinet, chaired by Prime Minister Narendra Modi, approved the proposal to extend subsidy support of Rs 1,250 crore to BSNL from the Universal Service Obligation Fund (USOF). The funds were for the deficit incurred by BSNL in operating rural wireline connections installed prior to April, 1, 2002.

USOF, since its inception in 2002, has been providing subsidy to BSNL for the rural wireline connections installed prior to April 2002.

So far as the 4G spectrum is concerned, it may be allotted to the company on a revenue-neutral basis, which essentially means that DoT would infuse equity in BSNL and the same amount would be utilised by the company to buy spectrum from the government at market-determined prices.

However, BSNL, in its demand, had said it wanted the 4G spectrum through 50 per cent capital infusion and 50 per cent market price to be determined from the 2015 auctions.

The Union government is also working on a bailout package of Rs 13,000 crore for BSNL, which includes Rs 6,365-crore VRS and 4G spectrum allotment through a Rs 6,767-crore equity infusion as well as monetising real estate.

BSNL’s debt stands at Rs 13,500 crore while that of the telecom sector is Rs 6.1 trillion.