Bharat Sanchar Nigam Limited (BSNL) and Bharat Broadband Network Limited (BBNL) are set to merge before the end of FY-22. This announcement was made by BSNL’s Chairman and Managing Director, PK Purwar, at an event organised by the All India Graduate Engineers and Telecom Officers Association (AIGETOA) on 13th March 2022.
BSNL shall also acquire responsibility for BBNL’s ongoing work related to the BharatNet scheme, which aims at extending internet connectivity to India’s hinterland.
Reason for Merging BSNL and BBNL – Delays on BharatNet Execution by BBNL?
BBNL was established in February 2012 as a Special Purpose Vehicle (SPV) by the Ministry of Communications, Government of India, to provide optical fibre connectivity to 2.5 lakh village panchayats under the BharatNet scheme, which was then known as National Optical Fibre Network (NOFN).
BharatNet Phase I had been finally completed by December 2017 and connected 1 lakh Gram Panchayats. Phase II of BharatNet is in progress and will connect the remaining 1.5 lakh Gram Panchayats. Deadlines have been missed and re-set several times for the completion of BharatNet Phase II. This phase was slated to be completed by August 2021 but is now expected to be complete by the end of FY-23.
BSNL and BBNL are major telecom Public Sector Undertakings (PSUs), with extensive Optical Fibre Cable (OFC) network deployment throughout the country. BSNL already has over 6.8 lakh Kilometres of OFC network in India, and after merging with BBNL it shall acquire an additional 5.67 lakh Kilometres of BBNL’s OFC network, which has been laid across 1.85 lakh village panchayats.
With such a wide OFC network of both BSNL and BBNL combined with BSNL’s brand value, it is expected that the merged entity will be able to be much more effective in providing last-mile connective to rural India, i.e. successful execution of upcoming phases of the BharatNet project.
According to the Government, as of 28th February 2022, the scheme was ready to service 1,72,361 Gram Panchayats (1,68,010 GPs on OFC and 4,351 GPs on satellite). Also, as of 31st December 2021, a sum of Rs. 27,582.7 crore had been disbursed for the BharatNet project.
This scheme is funded by Universal Service Obligation Fund (USOF), which is raised by charging all telecom licence holders a Universal Access Levy (UAL). This levy came into force on 1st April 2002.
Increase in BSNL’s Budget
At the AIGETOA event, Mr Purwar further said, “In the (Union) budget, provision of around Rs 45,000 crore has been made for BSNL. It was earlier Rs 24,000 crore. Earlier provision was only for spectrum. Now, it is spectrum capex and others”.
He was referring to the Rs. 44,720 crore which has been earmarked for BSNL in the 2022 Union Budget. The Government has sanctioned this amount for restructuring of loss-making BSNL.