Sunday, October 2, 2022

Government forms GoM for revival of BSNL, MTNL: Sources

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New Delhi: The government seems to be still considering the revival of state-run Bharat Sanchar Nigam Limited (BSNL) and Mahanagar Telephone Nigam Limited (MTNL), a source at one of the two telecom companies said on Thursday. According to an official aware of the developments, the government has formed a Group of Ministers (GoM) and has tasked it with preparing a Cabinet note on the revival of BSNL and MTNL.
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“As far as I know, a Group of Ministers has been formed to consider a revival package for BSNL and MTNL. The group is headed by Home Minister Amit Shah and has Minister of Finance Nirmala Sitharaman and Telecom Minister Ravi Shankar Prasad as its other two members. The group has been tasked with preparing a Cabinet note on the revival of BSNL and MTNL,” said the official on the condition of anonymity.

Employees ask PMO to consider revival package

Employees of state-run ailing teleco BSNL have urged the Modi government to approve the Rs 74,000-crore bailout package prepared by the Department of Telecommunication (DoT) for the revival of BSNL and MTNL. The ministry had earlier rejected the bailout package contending that bailing them out will cost more than closing them down. The employees of telecom PSUs have shown confidence that the company can be revived in three to four years as per the DoT’s estimate.

General secretary of Sanchar Nigam Executives Association K Sebastian has written a letter to PM Modi and urged him to approve the bailout package without delay. According to DoT sources, the ailing PSU has asked the government for help by converting its existing debt into a sovereign guarantee, a pay revision and a voluntary retirement scheme (VRS) apart from allowing BSNL to get 4G spectrum across India through equity infusion of Rs 7,000 crore.

“A Group of Ministers has been formed to consider a revival package for BSNL and MTNL. The group is headed by Home Minister Amit Shah and has Minister of Finance Nirmala Sitharaman and Telecom Minister Ravi Shankar Prasad as its other two members. The group has been tasked with preparing a Cabinet note on the revival of BSNL and MTNL”- Sources

The backdrop

BSNL has over 1.70 lakh employees and almost half of them are set to retire over the next five to six years. Only those employees on the verge of retirement will get a VRS while the rest of the bailout package can be used to turn around the state of affairs at BSNL.

The PSU teleco has suffered an estimated loss of Rs 14,000 crore in 2018-19 and it is likely to further increase as it fails to compete with new-age telecom providers like Reliance Jio, Airtel and others. BSNL’s total loss over the past four years has been pegged close to Rs 32,000 crore. PSU Watch had published a report a few days back that the Ministry of Finance has recommended the closure of battered state-owned telecom service providers BSNL and MTNL. The government had also ruled out strategic divestment of these two telecom companies as the sector is currently under immense pressure and both the PSU telcos are unlikely to get any bids.

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