NEW DELHI :
The government will revive debt-laden telecom operator BSNL Ltd and will work on making it profitable, Telecom Minister Ravi Shankar Prasad said in the Lok Sabha on Wednesday.
To trim mounting losses in BSNL, the government in October had announced a revival package that included the merger of Mahanagar Telephone Nigam Ltd (MTNL) with the former. Until the proposed merger, MTNL will operate as a subsidiary of BSNL.
The revival package also included raising sovereign bonds worth ₹15,000 crore, monetising assets amounting to ₹38,000 crore, and a voluntary retirement scheme (VRS) for employees.
BSNL employs 1.76 lakh people across the county, while MTNL has around 22,000 employees. The employee cost of BSNL and MTNL is 75% and 87% of their total income respectively.
Of the 1 lakh eligible for VRS, over 77,000 employees of BSNL have so far opted for the scheme, according to a PTI report. The effective date of voluntary retirement under the present scheme is 31 January 2020.
BSNL estimates savings of ₹7,000 crore in wages if 70,000-80,000 employees choose the scheme. According to the plan, all regular and permanent employees of BSNL ,including those deputed in other organisations or posted outside the corporation on deputation basis, above the age of 50 or above are eligible to seek voluntary retirement under the scheme.
The turnaround plan also included the allotment of spectrum for fourth-generation or 4G services at 2016 prices to the two companies with costs to be borne by the government.
The government aims to leverage the spectrum allotment to make BSNL and MTNL compete more effectively in the domestic telecom market, where a brutal tariff war and rising debt from purchases of airwaves at hefty prices in previous auctions have hurt players.
At 12:58 pm, shares of MTNL traded down nearly 5% at ₹8.99 on the BSE.