State-run Bharat Sanchar Nigam Ltd (BSNL) is seeking a sovereign guarantee from the Centre to raise around Rs 40,000 crore to repay debt and meet its capital expenditure (capex) for the deployment of ‘made in India’ next generation networks, since the land monetisation process has slowed down due to the pandemic.
“We have not got success in land monetisation process due to Covid-19 pandemic, and want a sovereign guarantee on a yearly basis until the process picks up, to raise money to reduce debt and meet capital expenses (capex),” BSNL chairman Pravin K Purwar told ET.
Purwar, who received a one-year extension of additional charge to look after Mahanagar Telephone Nigam Ltd (
), said the state-owned telco would require Rs 20,000 crore to meet capex, and a similar sum to service its debt for at least the next three years.
In a recent letter to outgoing telecom secretary Anshu Prakash, BSNL’s top official sought Rs 17,500 crore for capex and Rs 19,605 crore for servicing debt obligations between the current fiscal and FY24.
In September 2020, BSNL raised around Rs 8,500 crore through an issue of sovereign guaranteed bonds. It had earlier planned to monetise land assets worth about Rs 20,000 crore, which has not materialised.
BSNL said its total debt liabilities stand at nearly Rs 30,000 crore, and the telco is currently meeting operating expenses through internal accruals since it turned EBITDA (earnings before interest, taxes, depreciation, and amortization) positive last year.
“We are working in tandem with the government’s broad objectives to promote Indian technology… and since the homegrown technology is not deployed anywhere earlier, this could be a business risk,” the top official said, adding that sufficient funds would help meet upcoming expenses.
The telco would require Rs 12,500 crore to deploy 100,000 indigenously-developed sites, and Rs 5,000 crore for transmission network equipment, fiberisation, and IT infrastructure to service its subscriber base. At July end, BSNL had over 115 million mobile phone users, according to the telecom regulator. It has a 10% revenue market share (RMS) in the mobile telephony market dominated by private sector rivals such as Reliance Jio,
and Vodafone Idea.
Following a slew of controversies related to its tender for 4G expansion, the public sector telco has now started to deploy homegrown equipment as part of a pilot programme, in a bid to commercially launch 4G services.
(TCS)-backed consortium that includes Centre for Development of Telematics (C-DoT) and Bengaluru-based is deploying India’s first indigenous network for BSNL.
India’s telecom research wing C-DoT, as part of arrangement, is testing its core network together with radio equipment supplied by homegrown Tejas Networks with software components including OSS/BSS from TCS in Ambala and Chandigarh.