The government is planning to merge Bharat Broadband Nigam Limited with BSNL.

The Modi government is considering merging Bharat Broadband Nigam Limited (BBNL) with the loss-making state-run telecom operator Bharat Sanchar Nigam Limited (BSNL) this month, a senior official has said. This would create an merged company with a combined budget of Rs 10,000 crore which would have to be floated and put into public domain. The move comes as the Narendra Modi government struggles to find ways to save money in its rapidly expanding economy.

PK Purwar, BSNL chairman and managing director, at a recent event organized by the All India Graduate Engineers and Telecom officers Association (AIGETOA) said that the government is giving the telecom firm an opportunity for a turnaround.

The government has made a policy decision that BBNL will be merged into BSNL. This means all work at the pan-India level is going to come to BSNL.

BSNL has already acquired a network of 6.8 lakh kilometer of optical fibre cable, which is more than the existing wireless and 3G networks in India. Referring to his meeting with the union telecom minister, Purwar said he had an hour-long meeting to this effect.

The proposed merger will give BSNL a total of 5.67 lakh kilometers of optical fibre, which has been laid across 1.85 lakh village panchayats in the country using the Universal Service Obligation Fund (USOF).

Special purpose vehicle (SPV) BBNL was formed in February 2012, to lay out optical fibre network across 2.5 lakh village panchayats across the country using USOF and provide its access to all telecom operators on a non-discriminatory basis.

Telecom operators are required to pay an 8 per cent licence fee on their revenue from sales of telecom services. This includes a 5 per cent levy for the USOF.

The state governments do not levy right of way (RoW) charge on laying of OFC by the BBNL, which helps it in saving a significant amount compared to the fees that telecom operators are required to pay.

The Department of Telecom and BBNL did not reply to my query about theapsed call time.

BBNL officials said that employees in the department are not in favour of the proposed merger because of past non-performance on Bharatnet and pending dues from vendors, despite payment already made to state-run telecom firm by SPV.

Officials from the USofA shared a common view that transferring BBNL assets under one player would be against the idea and objective of creating a service-provider-vendor (SPV) model, which was supposed to provide rural broadband access on nondiscriminatory terms to all players.

Purwar said “There are no such views in our notice to BSNL. The delivery of BBNL to meet the objectives of Bharat Net is much below the desired level. BSNL, as a custodian of USOF assets, will ensure that all such assets are made available to all TSP/ISP and other agencies on arm length principles.”

In his speech at the conference, BSNL CMD asked employees to tighten their belt and put their best foot forward for the growth of BSNL, as political leadership has given a free hand for the turnaround and there is going to be no capex crunch for the next two years at least.

billion has been allocated for BSNL in the budget, which is more than what was provisioned for just spectrum in the past. The previous figure of Rs 24,000 crore was only for spectrum. Now that BSNL has secured its own telecom infrastructure and also bagged some great deals with telcos like Airtel and Idea Cellular, it is clear that they want to give you a free hand!

He said that the company is in the last stage of testing for 4G and may approach the board for placing a small order in the month of March, so that supply can start in the month of May and June.

The government’s expectation is that the Aadhaar project should be completed by August 15. Purwar said this during a commercial discussion.

He said that the next phase of telecom growth will come from fibre-to-the-home service and in the coming days, 1 lakh mobile base stations will serve as a point of presence for the distribution of fibre-based broadband connections to subscribers.

“If we lose this opportunity then there is no way that we will have an alternate option. The government is going against its stated policy for BSNL. If you see what CPSE actually looks like, it’s a company with a lax safety record and terrible customer service.”

BSNL is not only a strategic asset for the government, it also has a responsibility to prove itself.