The Union Cabinet has approved the merger of Bharat Sanchar Nigam Limited (BSNL) and Bharat Broadband Network Limited (BBNL), which could help revive BSNL. As part of this merger, the state-owned telco BSNL will receive a support package of ₹1,64,156 crore.
In a statement to ETTelecom, BSNL CMD PK Purwar explained how the two companies will be merged, “BSNL will work as an executing arm of the government and ownership of assets will rest with the government. BBNL has a workforce of less than 200. We have in our proposal said that we can absorb them in BSNL and contracts will be obliged, and revenue share agreements will be honoured.” BBNL is a special purpose vehicle (SPV) that was set up by the government to establish the BharatNet project.
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Currently, BSNL has an optical fibre cable network that spans over 6.83 lakh kilometres. After merging with BBNL, the state-run telco will get an additional 5.67 lakh kilometre of optical fibre. This fibre has been laid across 1.85 lakh village panchayats in the country, thanks to the Universal Service Obligation Fund (USOF). The USOF is a reserve worth ₹55,000 crores that has been established to improve connectivity in India’s rural and inaccessible areas.
As per the plan to revive BSNL, the merger will provide a package of ₹1,64,156 crore to BSNL. Additionally, the company will be allotted spectrum for high-speed data. This could help the government expand rural broadband connectivity in the country.