Government considering attractive VRS, bonds, 4G waves for BSNL, MTNL revival: Official

The Narendra Modi government is actively considering revival of the two state-owned telcos – Bharat Sanchar Nigam Limited and Mahanagar Telephone Nigam Limited (MTNL) – through a voluntary retirement scheme (VRS), allocation of 4G spectrum and reduction of debt, according to a senior official, who also denied reports of any plans to lay off employees.

“The government in close coordination with the BSNL Board is actively engaged in working out the voluntary retirement scheme (VRS) with attractive benefits,” the official said, adding that the entire scheme would be optional and those attaining 50 years of age can voluntary opt for it.

The VRS scheme for BSNL and MTNL would have a revenue impact of Rs 6,365 crore and Rs 2,120 crore, respectively, as per government estimates.

BSNL had 1.72 lakh employees while MTNL had a headcount of 22,000.

MTNL’s debt stands at around Rs 20,000 crore while BSNL has the industry-lowest debt of Rs 13,000 crore as of 2018.

“The government is also looking at some sort of support which may not be in the form of a direct cash infusion,” the official said, adding that the proposal to issue government-backed company bonds was also on the table.

Earlier, the two public-owned companies proposed the issuance of 10-year bonds to fund their VRS plans.

Both the state-controlled telecom firms, as a part of their revival strategy, have sought a nod from the Centre on VRS, assets monetisation and allocation of 4G radio waves to compete with the likes of Reliance Jio, Bharti Airtel and Vodafone Idea.

The Department of Telecommunications (DoT), according to the source, is also planning to seek a nod from the Election Commission of India (ECI) sometime soon, to take up the 4G rollout proposals of the two telcos to the Cabinet.

“Upon receiving necessary approvals, we will be able to launch high-speed 4G-Long-Term Evolution (LTE) services very soon,” BSNL chairman Anupam Shrivastava said, adding that the telco is initiating Pan-India trials on the existing 3G spectrum or the airwaves in 2100 Mhz band.

The department has already sought regulator’s views on the 4G spectrum allocation to the two service providers.