New Delhi: The government announced a massive
revival plan of around Rs 70,000 crore for the ailing state-run telecom
firms - BSNL and MTNL, as looks to nurse back the companies to health
and profitability over the next three to four years.
A VRS package amounting to nearly Rs 30,000 crore has been announced by the government for the aging employees of BSNL and MTNL. This will be offered to the employees who are above the age of 50. It also promises to prepay nearly 10 years of salary in advance, apart from the pensionary benefits. A few days ago employees were holding protests over delays in salary and speculation that the companies may be ordered to shut down in view of continued losses.
Telecom minister Ravi Shankar Prasad said, “However, let me add that this will be voluntary and there will be no forced deals.”
As per the official estimates, those above the age of 53 and a half years will get 125 per cent of today's salary including pension payout. According to a June 2019 official report, BSNL had over 1.16 lakh employees over the age of 50 years (total staff strength is 1.65 lakh), while MTNL had 19,000 employees over the age of 50 years with a total staff strength of 21,679.
Both the companies together hold about 14 per cent market share in the mobile business. They will also be merged but have to await sorting out of some operational and regulatory issues, as MTNL is a listed company, according to a news report in the national publication.
"BSNL and MTNL are strategic assets… they will not be closed or disinvested or hived off to any third party," telecom minister Ravi Shankar Prasad said, minutes after the revival package was cleared by the Union Cabinet chaired by PM Narendra Modi.
It may be noted that the BSNL is India's highest loss-making PSU whereas MTNL is the third highest. There was a 55 per cent rise in losses between 2014-15 from Rs 11,127 crore to Rs 17,202 crore in 2018-19. Except for Delhi and Mumbai, BSNL has pan-India operations. These two metro cities (Delhi and Mumbai) are covered by BSNL and their losses in 2018-19 were recorded at Rs 3,400 crore.
Also, 87 per cent of the MTNL's revenue goes to meet staff cost, however, the corresponding figure for BSNL is 77 per cent. As per the report in the national daily, Prasad said the government is confident that over the next two years, these two companies will be operationally profitable and may become fully profitable by the year 2023. Prasad added saying that debt is one area where BSNL and MTNL are relatively better off.
A VRS package amounting to nearly Rs 30,000 crore has been announced by the government for the aging employees of BSNL and MTNL. This will be offered to the employees who are above the age of 50. It also promises to prepay nearly 10 years of salary in advance, apart from the pensionary benefits. A few days ago employees were holding protests over delays in salary and speculation that the companies may be ordered to shut down in view of continued losses.
As per the official estimates, those above the age of 53 and a half years will get 125 per cent of today's salary including pension payout. According to a June 2019 official report, BSNL had over 1.16 lakh employees over the age of 50 years (total staff strength is 1.65 lakh), while MTNL had 19,000 employees over the age of 50 years with a total staff strength of 21,679.
Both the companies together hold about 14 per cent market share in the mobile business. They will also be merged but have to await sorting out of some operational and regulatory issues, as MTNL is a listed company, according to a news report in the national publication.
"BSNL and MTNL are strategic assets… they will not be closed or disinvested or hived off to any third party," telecom minister Ravi Shankar Prasad said, minutes after the revival package was cleared by the Union Cabinet chaired by PM Narendra Modi.
It may be noted that the BSNL is India's highest loss-making PSU whereas MTNL is the third highest. There was a 55 per cent rise in losses between 2014-15 from Rs 11,127 crore to Rs 17,202 crore in 2018-19. Except for Delhi and Mumbai, BSNL has pan-India operations. These two metro cities (Delhi and Mumbai) are covered by BSNL and their losses in 2018-19 were recorded at Rs 3,400 crore.
Also, 87 per cent of the MTNL's revenue goes to meet staff cost, however, the corresponding figure for BSNL is 77 per cent. As per the report in the national daily, Prasad said the government is confident that over the next two years, these two companies will be operationally profitable and may become fully profitable by the year 2023. Prasad added saying that debt is one area where BSNL and MTNL are relatively better off.
