The government announced a merger and revival package of Rs.70,000 crores for the loss-making telecom companies BSNL & MTNL. The revival package for BSNL and MTNL will include raising sovereign bonds, monetising assets and voluntary retirement scheme (VRS) for employees. The existence of BSNL is in the strategic interest of the nation as it alone serves more than 116 million subscribers across India.
Crux of the Matter
In a press conference on 23rd October, Telecom Minister Ravi Shankar Prasad said, “The government is hopeful that BSNL would become operationally profitable in the next two years by making BSNL and MTNL competitive, and bringing in professionalism.”
BSNL had reported an estimated loss of Rs 13,804 crore whereas MTNL showed Rs 3,400 crores loss in 2018-19, with a collective debt of both the telcos to nearly Rs 40,000 crore.
The revival package includes raising of Rs 15,000 crore sovereign bonds and Rs 38,000 crore asset monetisation scheme over the next four years.
Government to pay Rs 4,000 crore from the budget provision towards spectrum expense to give BSNL access to 4G spectrum.
87% of MTNL and 77% of BSNL revenue goes to meet staff cost. Thus, the cabinet has approved an attractive VRS package for the employees.
Pending the merger, MTNL will act as a subsidiary of BSNL.
Curiopedia
Bharat Sanchar Nigam Limited (abbreviated BSNL) is an Indian state-owned telecommunications company and has 1.76 lakh employees, while MTNL has nearly 22,000 employees. BSNL & MTNL together hold nearly 14% of the market share. BSNL is India’s oldest communication service provider and its history can be traced back to the British era. During the British era, the first telegraph line was established between Calcutta and Diamond Harbour. After the bifurcation of Post and Telegraph Department in the 1980s, the creation of the Department of Telecom by 1990s eventually led to the emergence of the state-owned telegraph and telephone company BSNL. More Info
Curated Coverage
Comments