BSNL, MTNL revival: Govt to discuss plan today

The Department of Telecommunications (DoT) will deliberate on revival of state-run BSNL and MTNL on Thursday as the financial condition of both the firms have deteriorated over the last couple of years due to increased competition.

According to sources, the Digital Communications Commission (DCC), the highest decision-making body of the DoT, will discuss various options to revive the sick telecom firms.

Apart from the proposals submitted by the two firms, the DoT is also exploring the idea of transferring employees of the firms to other departments like BBNL, Bharatnet, among others, so that the wage bill of the companies can be reduced and an immediate relief is provided.

A high wage bill has been the main reason for the bad financial health of the companies, apart from cut-throat competition in the telecom sector.

Regarding the amount sought by the firms to fund day-to-day operations, the DoT is of the view that they should approach banks for a loan.

Allocation of 4G spectrum in 2100 Mhz is also being actively considered by the government, but a final decision in this regard will be taken by Cabinet.

In its revival proposal submitted to the DoT, BSNL has listed out four options — reduction in employee cost, monetisation of spare land and building, allotment of 4G spectrum and payment of interest cost of surrendered BWA spectrum.

The company has suggested to reduce the retirement age to 58 from the current 60 which will save `3,000 crore in wage bill from FY 2019-20.

It has also proposed voluntary retirement under the Gujarat model, allowing the company to save `3,000 crore.

Similarly, MTNL has submitted its proposal. MTNL, which operates in Delhi and Mumbai, has a net debt of `19,000 crore. The accumulated losses of BSNL at the end of March 31, 2018 stood at `31,287 crore. For FY19 also, the company is likely to report a net loss in the range of `7,000-8,000 crore.

Bharat Sanchar Nigam Limited (BSNL)