Union Cabinet approves BSNL-BBNL merger; Revival package announced

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On Wednesday (June 27), the Union Cabinet finally approved the merger between Bharat Sanchar Nigam Limited (BSNL) and Bharat Broadband Network Limited (BBNL) at a cabinet meeting after months of pending proposals. BSNL will act as a wing under the government and will absorb both the assets and employees of BBNL thereby fortifying both the fibre optic network and workforce.

Union Cabinet allows BSNL and BBNL merger

According to an Economics Times report, the merger will allow BSNL to extend its fibre optic network to a great extent. BSNL already has 6.83 lakh kilometres of optical fibre laid out while BBNL has a network of 5.67 lakh kilometres spread across 1.85 lakh village panchayats thanks to assistance from the Universal Obligation Fund (USOF). Once the merger goes through, the total effective fibre optic network would be 12.5 lakh kilometres.

Apart from the network, BSNL will also absorb the workforce at the BBNL which is less than 200 as per PK Purwar of BSNL. The government postponed the merger between BBNL and MTNL, however, it already had plans for the merger between BSNL and BBNL. Now that the proposal has gone through, the merger can be initiated with the state-owned telecom operator and BBNL.

Going forward, Union Minister Ashwini Vaishnaw announced a revival package for BSNL worth INR 1,64,156 crore and will be used across three portions. The package will be used across improving the quality of the services at BSNL. Apart from that, a second portion of the allocated revival package will towards stabilizing the balance sheet at BSNL. The third portion will be used to fortify the BSNL optical fibre network ahead.

Moving further, the government has decided to mark INR 33,000 crore worth of statutory dues at BSNL as equity. Here, BSNL will act under the government which owns all the assets as well.

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