New Delhi (NVI) Government on October 23 decided to merge its loss-making telecom PSUs — MTNL and BSNL — as part of a revival plan which will include monetisation of assets and cut in employee costs.
This was decided in an Union Cabinet meeting, chaired by Prime Minister Narendra Modi, an official statement said adding the revival plan includes infusing Rs 20,140 cr besides, GST amount of Rs 3,674 cr in the two companies.
Meanwhile, Union Minister Ravi Shankar Prasad said, “The Cabinet decided that BSNL and MTNL will neither be closed nor disinvested nor sold to a private entity”.
The plan also includes administrative allotment of spectrum for 4G services, debt restructuring by raising of bonds with sovereign guarantee, reducing employee costs and monetisation of assets.
The government said that spectrum will be funded by the Centre, by capital infusion in these PSUs at a value of Rs 20,140 cr besides GST amount of Rs 3,674 cr to this spectrum value will also be borne by the government through budgetary resources.
By using this spectrum allotment, the PSUs will be able to deliver 4G services, compete in the market and provide high speed data using their vast network including in rural areas.
The government said that BSNL and MTNL will also raise long-term bonds of Rs 15,000 cr, for which sovereign guarantee will be provided by the it.
With the said resources, both the PSUs will restructure their existing debt and also partly meet CAPEX, OPEX and other requirements, the statement said.
Moreover, BSNL and MTNL will also offer voluntary retirement to their employees, aged 50 years and above through attractive Voluntary Retirement Scheme (VRS), the cost of which will be borne by the government through budgetary support.
The ex-gratia component of VRS will require Rs 17,169 cr in addition, the Centre will be meeting the cost towards pension, gratuity and commutation. Details of the scheme will be finalised by BSNL or MTNL.
The government said that BSNL and MTNL will monetise their assets to raise resources for retiring debt, servicing of bonds, network upgradation, expansion and meeting the operational fund requirements.
It is expected that with the implementation of the said revival plan, BSNL and MTNL will be able to provide reliable and quality services through its robust telecommunication network throughout the country including rural and remote areas.
–rb
