The government is functioning on a Rs 74,000 Cr bailout package for state-run telecommunication firms Bharat Nigam Sanchar Nigam (BSNL) and Mahanagar Telephone Nigam (MTNL), reports the days of India.
Government Planning Rs 74,000 Cr Bailout for BSNL, MTNL
The theme involves an attractive exit package of an extra 5 percent compensation (ex-gratia) and provisions for 4G spectrum and cost, the report same.
BSNL is India’s largest loss-making state-run entity, with losses calculable at Rs 13,804 Cr as of FY19-end. MTNL comes third with a loss of Rs 3,398 crore. Only national carrier Air India contains a higher loss than MTNL.
Of the projected bailout, concerning Rs 20,000 Cr are going to be assigned for 4G spectrum and Rs 40,000 Cr for a voluntary retirement theme (VRS) and early retirement advantages. the 2 PSUs can, however, pay roughly Rs 13,000 Cr on cost.
The government thinks lowering the retirement age to 48 from 60 and giving a good VRS package can lower price at the loss-making firms, the report same. The move would alter them to aggressive pitch new tariff plans.
Recently, BSNL same it’s cleared employees’ salaries for June. It added that it’s awaiting clearance of dues value Rs 14,000 Cr from the Department of Telecommunications (DoT).
The government is also evaluating the choice of monetizing assets towers, land bank, and fiber of BSNL and MTNL. A draft cupboard note has been circulated on the topic, the report added.
DoT same the bailout could be a higher possibility than shuttering the 2 PSUs, which is able to price Rs 1.2 lakh crore, the report expressed. The department is of the read that a strategic divestment won’t notice too several consumers, given the money pressure within the telecommunication sector.
A venture between MTNL associated BSNL is a possibility, the department added.
BSNL and MTNL are troubled to contend with non-public players within the sector because of high prices and poor management. Neither company has extended 4G services, whereas non-public firms launched their offerings some years back. The average revenue per user (ARPU) of those 2 telcos stands at Rs 38 compared to Rs 70 for personal players.