BSNL cleared Rs 1,700 cr in dues to vendors; paid November salaries: CMD

State-owned Bharat Sanchar Nigam Ltd (BSNL) has cleared Rs 1,700 crore of vendors dues, its CMD P K Purwar said on Monday.

The corporation has also made salary payment to its employees for November, Purwar added.

"Payments worth Rs 1,700 crore have been released to our vendors and contractors of BSNL," he said.

Overall, the outstanding to creditors is Rs 10,000 crore, he added.

"Employee salaries for November too have been released," he said adding that monthly wage cost stood at about Rs 800 crore.

In October this year, the government approved a Rs 69,000 crore revival package for BSNL and MTNL that includes merging the two loss-making firms, monetising their assets and giving VRS to employees so that the combined entity turns profitable in two years.

The Union Cabinet headed by Prime Minister Narendra Modi had approved a plan to combine Mahanagar Telephone Nigam Ltd - which provides services in Mumbai and New Delhi - with Bharat Sanchar Nigam Ltd that services the rest of the nation.

Over the last few weeks both the companies launched theirs VRS plans and thousands of employees of BSNL and MTNL have opted for voluntary retirement, which is expected to save about Rs 8,800 crore annually in salary bills for the debt-laden telecom companies.

The two firms will also monetise assets worth Rs 37,500 crore in the next three years.

MTNL has reported losses in nine of the past 10 years and BSNL too has been ringing in loss since 2010.

92,000 BSNL, MTNL employees opted for VRS scheme, says Ravi Shankar Prasad

More than 92,000 employees of BSNL and MTNL have opted for voluntary retirement, Union minister Ravi Shankar Prasad said on Wednesday as he asserted that the government will make the two telecom companies profitable as they are strategic assets. The Communications Minister told the Lok Sabha that the merger of BSNL and MTNL will have pan-India foot print, synergy in operations, reduction of fixed costs and overheads, among others.

The merger would resultantly help the two companies to "provide better quality services to customers on a pan-India basis," he said. During the Question Hour, the minister said over 92,000 employees of BSNL and MTNL have opted for Voluntary Retirement Scheme (VRS). As part of revival efforts, VRS was introduced for the staff of the two telecom firms and December 3 was the last date for submitting the applications. The employee costs at both firms are high.

Both companies are strategic assets and the government would make them more professional and profitable, he emphasised.

He also said that whether it is floods in Kashmir or Tamil Nadu, cyclone in Odisha, BSNL provides free services. The Cabinet has approved administrative allotment of spectrum to BSNL and MTNL for providing 4G services. "With rollout of 4G services on a pan-India basis, BNSL/ MTNL will be able to provide high speed mobile Internet services in a data-centric market which will further improve the customer experience," the minister said.

MTNL operates in Delhi and Mumbai while BSNL is present in rest of India. JD(U) member Rajiv Ranjan Singh raised concerns about call drops and poor connectivity in the national capital, saying that if one tries 50 times on MTNL network, it is only around 5 times the calls get connected. In response, Prasad said there is need for technological upgradation.

To a supplementary by RSP leader N K Premachandran about poor connectivity in the national capital, the minister said installing a mobile tower in Delhi is very difficult and cited that earlier he had found it difficult to even install a tower in Parliament premises. Separately, Prasad said the Department of Telecommunications (DoT) has taken necessary steps and adopted strict norms for safety from Electromagnetic Field (EMF) emission from mobile towers.

"In India, norms for exposure limit for the Radio Frequency Field (Base Station Emissions) have been fixed ten times more stringent than safe limits prescribed by International Commission on Non Ionising Radiation Protection (ICNIRP) and recommended by World Health Organisation (WHO)," he added.

Shiv Sena member Sadashiv Kisan Lokhande said birds in small villages are getting affected by radiation from mobile towers.

In response, Prasad said birds are healthy and asked whether there is any evidence about adverse impact on birds. During the Question Hour, Speaker Om Birla again asked members to ensure that questions as well as answers by ministers are kept short so that more supplementaries can be taken up. The matter needs to be discussed, he added.

Over 92,000 employees of BSNL, MTNL opt for voluntary retirement scheme

Over 92,000 employees of state-run BSNL and MTNL have so far opted for the recently announced VRS , according to a government source.

The source said the scheme and the strong response it has generated marks the biggest milestone in the history of these state-owned corporations.

Over 92,000 employees of BSNL and MTNL have opted for the scheme so far, the source added.

Nearly 100,000 BSNL employees are eligible for the Voluntary Retirement Scheme (VRS) out of its total staff strength of about 150,000. The effective date of voluntary retirement under the present scheme is January 31, 2020.

The 'BSNL Voluntary Retirement Scheme - 2019', that was rolled out recently, will remain open till December 3. BSNL is looking at savings of about Rs 7,000 crore in wage bill, if 70,000-80,000 personnel opt for the scheme.

According to the plan, all regular and permanent employees of BSNL including those on deputation to other organisations or posted outside the corporation on deputation basis, who attended the age of 50 years or above are eligible to seek voluntary retirement under the scheme.

The amount of ex-gratia for any eligible employee will be equal to 35 days salary for each completed year of service and 25 days salary for every year of service left until superannuation.

Mahanagar Telephone Nigam Ltd (MTNL) too has rolled out a VRS for its employees. The scheme, based on Gujarat Model, will be open for employees till December 3, 2019.

The Union Cabinet had last month approved a plan to combine MTNL - which provides services in Mumbai and New Delhi - with BSNL that services the rest of the nation.

The rescue package approved by the government includes infusion of Rs 20,140 crore for purchase of 4G spectrum, Rs 3,674 crore for GST to be paid on spectrum allocation, companies raising Rs 15,000 crore in debt on the sovereign guarantee and government funding Rs 17,160 crore VRS and another Rs 12,768 crore towards retirement liability.

The two firms will also monetise assets worth Rs 37,500 crore in the next three years. MTNL has reported losses in nine of the past 10 years and BSNL too has been ringing in loss since 2010. The total debt on both companies stood at Rs 40,000 crore, of which half of the liability is on MTNL alone.

After BSNL, MTNL's VRS gets strong response, 13,500 staffers opt for scheme

After BSNL, state-owned Mahanagar Telephone Nigam Ltd (MTNL) on Wednesday said its VRS plan has surpassed its internal estimates as more than 13,500 employees have opted for the recently-announced scheme so far. MTNL had initially expected the voluntary retirement scheme (VRS) optees to touch 13,500, but the numbers have already reached 13,532 employees, with nearly two weeks left to go before the closing date for exercising the option.

"We have received a strong response; and so far, as many as 13,532 employees have opted for the VRS scheme. Our internal target had been 13,500," MTNL Chairman and Managing Director Sunil Kumar told PTI.

He promised that the corporation will try to accommodate as many employees as possible.

"We expect the numbers to reach the range of 14,500 to 15,000 by the closing date," he said adding that, in all, 16,300 employees are eligible for the scheme.

In case of Bharat Sanchar Nigam Ltd (BSNL), as many as 77,000 employees of state-owned telecom corporation have opted for the recently launched VRS until now.

Mahanagar Telephone Nigam Ltd (MTNL) scheme, based on Gujarat Model of VRS, will be open for employees till December 3, 2019. It has said that "all regular and permanent employees of 50 years and above as on January 31, 2020" are eligible to opt for the scheme.

The government has approved a plum Rs 69,000-crore revival package for BSNL and MTNL that includes merging the two loss-making firms, monetising their assets and giving VRS to employees so that the combined entity turns profitable in two years.

The Cabinet has approved the plan to combine MTNL - which provides services in Mumbai and New Delhi - with Bharat Sanchar Nigam Ltd (BSNL) that services the rest of the nation.

MTNL has reported losses in nine of the past 10 years and BSNL too has been reporting losses since 2010. The total debt on both the companies stood at Rs 40,000 crore, of which half of the liability is on MTNL alone.

Govt approves BSNL-MTNL merger, clears Rs 70,000-crore relief package

Just days before Diwali, the government has taken a decision to lift the air of uncertainty over the two public sector telecom behemoths — Bharat Sanchar Nigam Ltd (BSNL) and Mahanagar Telephone Nigam Ltd (MTNL). While approving a package of nearly Rs 70,000 crore for the two financially stressed entities, the Union Cabinet on Wednesday also drew up a timeline to merge them. Monetising real estate assets worth Rs 37,500 crore is part of the overall relief package that would be used to retire debts, upgrade networks and offer a voluntary retirement scheme (VRS) aimed at reducing the companies’ employee strength by half.

The government has said that the two companies are strategically important and will not be closed down or disinvested. Recent reports had suggested that some key ministries were of the view that the revival of BSNL and MTNL was not feasible, and that they could be shut down. Briefing the media after the Cabinet decision, Telecom Minister Ravi Shankar Prasad categorically said the government was neither closing down, nor divesting its stake in, BSNL and MTNL.

The relief package includes a sovereign bond issue worth Rs 15,000 crore, to be serviced by the two telcos. Also, BSNL and MTNL will be allotted 4G spectrum at an administered price, pegged at the 2016 auction value. The two firms would be allotted 4G spectrum worth Rs 20,140 crore, Rs 29,937 crore for VRS covering 50 per cent of their employees and Rs 3,674 crore for goods and services tax (GST) that will be levied on allocation of radiowaves. Details of the VRS scheme will be finalised by the two firms.

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The ex-gratia component of VRS, to be offered to employees aged 50 years and above, will require Rs 17,169-crore budgetary support. Another Rs 12,768 crore will be towards preponement of pensionary benefit. Giving an instance of how the scheme will work, Prasad explained, “the VRS package approved by the Cabinet will give eligible employees 125 per cent of the income they would have earned by serving the company till the age of 60 years.” The minister said, “with this decision, we have taken care of the interest of lakhs of employees of these PSUs.” BSNL has around 1,76,000 employees and MTNL workforce is at 22,000.

Private telcos are estimated to spend 5 per cent of their total expenditure on staff cost, while for BSNL and MTNL it works out to 70 per cent of the total.

On asset monetisation to be spread over three to four years, Saurav Kumar, Partner, IndusLaw, said, “if the company plans to do a slump sale of such land banks at book value into a separate company along with the liabilities, they may have to show the real estate asset as a separate business undertaking.’’ Also, as India gears up up for the 5G launch, it may become challenging for BSNL and MTNL to break even on the price they will be expected to pay for the new 4G spectrum, he added.

Telecom Secretary Anshu Prakash said the spectrum will be allocated to both the companies administratively within a month. BSNL will also need around Rs 10,000 crore to roll out 4G services in phases and MTNL an estimated Rs 1,100 crore. “The spectrum allocation to BSNL worth Rs 14,115 crore will be in lieu of equity shares and about Rs 6,295 crore for MTNL in lieu of preferential shares,” Prakash said. On monetisation of real estate, Prasad said assets worth Rs 38,000 crore had been shortlisted. The assets primarily include land as well as rental and leasing of buildings. MTNL has around 29 retail outlets in Delhi alone.