- BSNL and BBNL are likely to be merged this month
- BSNL-BBNL merger will provide the telecom firm a chance for a turnaround
- Merger may provide BSNL Rs 60,000 crores of assets and funds
BSNL (Bharat Sanchar Nigam Limited) and BBNL (Bharat Broadband Nigam Limited) are likely to merge this month. At a recently held AIGETOA (All India Graduate Engineers and Telecom Officers Association) meeting, BSNL Chairman and Managing Director PK Purwar said that the government is providing the state-owned telecom firm with a chance for a turnaround.
“The government has decided that BBNL is going to be merged into BSNL. This means all work of BBNL at the pan-India level will come to BSNL,” Purwar said during the All India Conference held by AIGETOA, which was held on March 13th, 2022. According to a report by the Indian Express, Purwar said that the process of merging BSNL and BBNL was scheduled to be completed by March 31st, 2022.
BSNL may gain 60,000 crore of assets, funds through merger
BBNL, a special purpose vehicle (SPV) was formed in February 2012 to implement the BharatNet project of providing broadband connectivity to 2.5 lakh rural areas across India by using the Universal Service Obligation Fund (USOF). As per telecom licence agreements, telecom operators are required to pay a licence fee of 8 percent to BBNL from the revenue generated through the sale of telecom services, which also includes a 5 percent levy for USOF.
The state government does not need to charge an RoW (right of way) fee on BBNL for laying optical fibre cable (OFC), which results in a significant saving. At present, BSNL has more than 6.8 lakh kilometres of OFC. The merger with BBNL will provide BSNL access to 5.8 lakh kilometres of OFC spanning 1.85 lakh village panchayats.
The merger of BSNL and BBNL could possibly allow the former to gain assets and funds worth Rs 60,000, which could eventually help in coming out of the financial crunch. BSNL is expected to deploy 4G and 5G networks this year. The merger will also help BSNL reach more areas across India at a faster pace.
Some BBNL officials are reportedly unhappy with the merger since it will give BSNL access to USOF, which may “create controversy and impropriety issues.” A senior DoT official who did not wish to be named said, “All telecom operators contribute to the USOF. So if the government goes ahead with this merger, it will seem like only BSNL will get to use the fund. That could create problems for us.”