BSNL quashes news reports of closure, says govt working on revival plan1 min read . Updated: 10 Oct 2019, 06:58 PM IST
- A newspaper reported a couple of days ago that FinMin has suggested that the sick PSU be shut down
- 'There is a plan under consideration for revival of BSNL by the govt by giving suitable package in terms of VRS and allowing monetisation of assets,' the company said in a statement
New Delhi: State-run operator Bharat Sanchar Nigam Ltd has said there is no plan to shut the company down and it will continue to offer telecom services in the country.
The company’s statement comes two days after the Financial Express newspaper reported that the finance ministry has suggested that the sick PSU be closed down.
“Recently there has been (an article) published in the media about closure of BSNL. In this regard, it is clarified that there is a plan under active consideration for revival of BSNL by the government by giving suitable package in terms of VRS and 4G spectrum and allowing monetisation of assets available with BSNL," the state-run operator said in a statement on Thursday.
To be sure, BSNL’s operations are not all smooth. For the first time in its history, BSNL delayed its February salaries. The company has been making losses continuously since 2009-10 and has been declared "incipient sick".
Yet, there is hope, but only if Department of Telecommunications (DoT) gets its act together. The company has strong assets. BSNL, as of March 2018, owns land worth ₹70,000 crore and buildings worth ₹3,760 crore.
The company has also sought spectrum by equity infusion of ₹6,767.5 crore. The DoT is currently working on a revival plan for it which suggests voluntary retirement scheme (VRS) for employees and BSNL’s land monetization. DoT plans to fund VRS packages for BSNL at ₹6,365 crore and through bonds. BSNL has 176,000 employees.
The VRS package, however, needs to be approved by the Telecom Commission and the Union Cabinet.
Besides, BSNL has grown its market share while private telcos have shut shop. By 31 March, 2016, it had a 9.66% market share in mobile connections, which grew to 11.51% as of 31 March 2018, and 12.64% as of 31 September 2018.
BSNL also has huge tower assets. Its subsidiary BSNL Tower Corp. Ltd (BTCL), was incorporated in January 2018. The idea is to improve cash flow for BSNL, which has not yet transferred the towers to BTCL. The new tower company will set up a joint venture company with a partner, preferably within two years, on achieving financial health and stability with the objective of monetisation of its assets, former telecom minister Manoj Sinha informed the Lok Sabha on 13 February.