Govt considering Rs 74,000-crore bailout plan to revive BSNL, MTNL: Report

The plan offers an exit package to thousand of employees, including an additional 5% compensation to make the VRS attractive

The government is considering a Rs 74,000-crore bailout plan for revival of two state-owned telecom companies Bharat Sanchar Nigam Ltd (BSNL) and Mahanagar Telephone Nigam Ltd (MTNL), a media report said.

The plan offers an exit package to thousand of employees, including an additional 5% compensation to make the voluntary retirement scheme (VRS) attractive, while providing for 4G spectrum and capital expenditure, Times of India reported.

One of the main reasons for the company running in lossES has been high expense ratio between wages and revenue on account of large number of employees that were transferred by the government to BSNL at the time of its formation.

According to official data, a total of 1,63,902 employees, including 46,597 executive and 1,17,305 non-executive, were working in BSNL as on March 31, 2019.

While BSNL is the country's biggest loss-making PSU with estimated Rs 13,804 crore in FY19, MTNL came in  third with a loss of Rs 3,398 crore.

Officials familiar with the proposal told Times of India that 4G spectrum valued at over Rs 20,000 crore will be allotted by the government and rollout cost of around Rs 13,000 crore will be paid by the PSUs. The government will foot the bill of little over Rs 40,000 crore towards the VRS package and early-retirement benefits.

The Union government has set up a panel headed by Telecom Secretary Aruna Sundararajan to look at rationalisation and remove ambiguities in ease of doing business.

The panel will revisit spectrum usage charges and the report is expected in two weeks.

If the issues require legal clarity, the matter will go to the Solicitor General of India. Attorney General K K Venugopal has appeared for telecom companies in the past.

“We will make a focused attempt on the revival of BSNL and MTNL and will move a Cabinet note on that very soon. The details are being worked out,” Telecom and IT Minister Ravi Shankar Prasad said.