BSNL fails to pay February salary to 1.76 lakh employees

State-owned telecom firm BSNL, which has been in the red for the past more than five years, failed to pay February salaries to its around 1.76 lakh employees due to financial constraints.

This is the first instance of the company defaulting on salary payments underlining the tough times for it ahead.

The employees’ union has written to telecom minister Manoj Sinha urging that the government release funds to the company to pay the salaries as well as revive the ailing firm.

The employees have also been holding demonstrations.

Around 55% of BSNL’s revenues goes towards payment of wages, and while the company’s wage bill increases annually by 8%, its revenues are stagnant.

The associations and unions of BSNL have also said that the financial health of telecom industry has suffered because of the predatory pricing of Reliance Jio. “Financial crisis is being faced by other operators also but they are managing the situation by infusing huge amounts,” a letter by All Unions and Associations of BSNL (AUAB) to Sinha said.

A BSNL officials told FE that the company has started paying February salaries now to staff in Kerala, J&K, Odisha and the corporate office. “As and when the income is generated, salaries will be paid to the staff. As the government has not given any financial support, the salaries are being delayed,” the official said.

The source further said even March salaries will be delayed by a few days despite the fact that cash flows in the month are usually higher because of billing from the enterprise business.

also read: Retail inflation up for first time in 4 months, factory output slows; Will RBI cut rates?Another source said that the BSNL board has approved a proposal to avail bank loan but the department of telecommunications has not given the go-ahead yet.

The losses of BSNL has been increasing every year. It reported a loss of around `8,000 crore for FY18, compared to `4,786 crore in FY17. For FY19 also, the loss is expected to be higher than `8,000 crore.

Bharat Sanchar Nigam Limited (BSNL)