BSNL is set to enhance its 4G network coverage and clear dues to telecom network supplier Nokia as India government has provided a letter of comfort (LoC) of Rs 30,000 crore to the ailing telecom operator.
BSNL will utilize the LoC in order to assist the telecom operator to raise loans for meeting its capital expenditure (Capex) needs for rolling out 4G network.
BSNL does not have nationwide 4G coverage as compared with private mobile operators like Bharti Airtel, Vodafone Idea and Reliance Jio. Mukesh Ambani-promoted Reliance Jio is the leader in terms of 4G coverage in India.
BSNL aims to expand 4G network coverage with an estimated Capex of Rs 12,000 crore. The Capex plans to build a strong mobile data network across India will assist BSNL to improve ARPU and revenue streams.
This apart, BSNL will be using funds to clear dues worth over Rs 10,000 crore to its vendors. Finland-based network provider Nokia alone has over Rs 2,000 crore of dues pending from BSNL.
Clearing Nokia’s dues is one of the top priorities of BSNL before it comes out with a tender for rolling out its 4G network. BSNL has sought a loan of Rs 4,000 crore to Rs 5,000 crore from State Bank of India (SBI) to meet its immediate Capex requirements, Financial Express reported.
The government has cleared a Rs 70,000 crore revival package for BSNL and MTNL, but the LoC will be over and above the package.
India government will be providing Rs 23,814 crore towards administrative allocation of 4G spectrum to both BSNL and MTNL. The two firms will also raise long-term bonds of Rs 15,000 crore. BSNL and MTNL will use this amount to restructure their existing debt and partly meet their Capex, Opex and other requirements.
The government also said the two PSUs would monetise their assets like land etc worth Rs 38,000 crore over a period of four years.
Meanwhile, BSNL has submitted details of 14 properties worth Rs 20,160 crore to the Department of Investment and Public Asset Management (DIPAM) as part of the telecom corporations’ asset monetisation plans, PTI reported.
The report said that the Ministry of Skill Development is looking for a land parcel and the Department of Telecom (DoT) has offered BSNL land in Ghaziabad to the ministry. The estimated value of that land is Rs 2,000 crore, the report said.