Eyeing ‘turnaround’, BBNL to merge with BSNL by month-end

The merger of Bharat Broadband Network Limited (BBNL) and Bharat Sanchar Nigam Limited (BSNL) can be accomplished this month, the latter’s Chairman and Managing Director, P Ok Purwar, has stated.

Speaking at an occasion earlier this month, Purwar stated the federal government had already taken the “policy decision” to merge BBNL and BSNL and that the method was scheduled to be accomplished earlier than March 31.

“BBNL is going to be merged in BSNL. This means that all of BharatNet work being done on an India basis will come to BSNL. The government has taken this policy decision,” Purwar stated at an occasion organised by All India Graduate Engineers and Telecom officers Association (AIGETOA).

The Indian Express had on January 9 reported that the federal government had determined to merge BBNL and BSNL by the tip of this fiscal and that the latter was more likely to end BharatInternet work, began by BBNL.

BBNL, a particular goal car (SPV) of the Ministry of Communications, was integrated in 2012 as a public sector unit. It was handed over the duty of implementing the BharatInternet challenge, which was until then often called National Optical Fibre Network (NOFN). The SPV is funded from the Universal Service Obligation Fund (USOF), which is raised from a Universal Access Levy (UAL) relevant to all telecom licence holders. It got here into impact from April 1, 2002 and mandated that every one telecom service suppliers should pay a share of their income into the USOF. During the occasion organised by AIGETOA, Purwar stated telecom minister Ashwini Vaishnaw had referred to as him as much as talk about the small print of the merger and requested him to “take over” BBNL earlier than March 31.

ExplainedWhat does BBNL do?

BBNL, a particular goal car of the Ministry of Communications, was integrated in 2012 as a public sector unit. It was handed over the duty of implementing the BharatInternet challenge. The SPV is funded from the Universal Service Obligation Fund, which is raised from a Universal Access Levy relevant to all telecom licence holders.

“The Minister told me that we have a free hand to shape the turnaround. In the 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. So the government wants to give you a free hand. Can you perform?,” Purwar stated, including that BSNL was within the ultimate levels of 4G testing and and will quickly began ground-level community testing and deployment.

“The government is going against its stated policies (for BSNL) and wants to give a chance to become a strategic asset. We have to prove ourselves,” he stated whereas addressing the gathering.

Some officers from BBNL have, nonetheless, expressed their reservations towards the proposed merger, saying the merger of the corporate with BSNL will give the latter direct entry to the USOF, which is more likely to “create controversy and impropriety issues”.

“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,” a senior DoT official stated, asking to not be named.

As per telecom licence agreements, telecom service suppliers need to pay 8 per cent licence charge on their income from sale of telecom service, of which 5 per cent goes in the direction of the USOF.

With the merger of BBNL and BSNL, this fund — which at the moment stands at near Rs 60,000 crore — is more likely to go to BSNL and assist the state-run telco come out of its crunch.