BSNL, MTNL may look at leveraging assets to fix finances

Troubled state-run telecom companies — Bharat Sanchar Nigam Ltd (BSNL) and MTNL — which are expecting a bailout package from the government and thinking of monetising assets, have to come up with an out-of-the-box plan to ensure their survival. The first factor that the companies need to address are salaries, which have become a heavy burden due to their bloated headcounts. BSNL has the largest number of employees among all the telecom operators, but, the company handles only 650 customers per employee, while MTNL handles just 160. These indicate far less productivity than their private sector peers.

Moreover, BSNL uses 60 per cent of its revenue in paying its employee’s salaries which has severely hit the company’s profit margins even as its market share has fallen drastically over the years. This figure is much higher for MTNL, which mainly operates in Mumbai and Delhi. In the December quarter, the company’s salary cost came in at `577.2 crore and exceeded its revenue of `514.5 crore. NITI Aayog, the central government think tank, has even suggested shutting down the company.