- BSNL has been facing severe financial issues for over a couple of years now
- The government-owned PSU now assures there will not be any service disruption to the users
State-run telco BSNL has been facing a lot of issues due to the financial problems. The new BSNL chief P K Purwar has sought to allay concerns over the possibility of large-scale service disruption due to the telecom company’s financial difficulties, saying monthly revenue of Rs 1,400-1,500 crore that the telecom corporation continues to generate demonstrates its “inner strength”. “I have revenue earning of Rs 1,400-1,500 crore a month which gives enough indication that the organisation has a lot of inner strength. No, there is no scenario like what some people are saying (service disruption),” BSNL Chairman and Managing Director P K Purwar told PTI.
Reports State BSNL Customers May Face Network Disruption Going Forward
Purwar was responding to a query on recent reports that the state-owned telco may be staring at the possibility of regional service disruption due to its financial health and the ongoing movement of contractual workers on demand of pending wages. Asked about the status of contractor payments, Purwar conceded that there were cases where the payments are getting delayed but did not specify the quantum of outstanding dues to contractors.
“Yes, there are a few instances where the payments are getting delayed. We are releasing funds also, but it is a continuous process… When services are being rendered for operations, in a continuous manner, payments are also being made,” he said.
Bharat Sanchar Nigam Limited (BSNL) has been in the grip of severe liquidity crunch, and recently delayed payment of employees’ wages for the second time this year. BSNL on Monday said it has now released July salaries of employees.
The cash-strapped telecom PSU has embarked on an exercise to ‘streamline‘ outsourced functions for saving up to Rs 200 crore a year, and also hopes to rationalise power bills to derive 15% cost savings.
That said, it faces a gap of about Rs 800 crore between its monthly revenue and expenses (operational expenditure and wages).
DoT Preparing a Rescue Plan for BSNL and MTNL
The telecom department is preparing a rescue plan for BSNL as well as Mahanagar Telephone Nigam Ltd (MTNL) in the form of a revival package that entails components like voluntary retirement scheme, asset monetisation, and allocation of 4G spectrum.
The department is also “working on” a proposal for merger of cash-strapped PSUs as part of efforts to revive the ailing state-owned telecom firms. BSNL’s loss is estimated to be around Rs 14,000 crore with a decline in revenue to Rs 19,308 crore during 2018-19.
BSNL’s losses rose steadily from Rs 4,859 crore in 2015-16, Rs 4,793 crore in 2016-17, Rs 7,993 crore in 2017-18 and is estimated to swell to Rs 14,202 crore in 2018-19. The number of employees of BSNL stands at 1,65,179 and the total employee cost is a staggering 75% of the total income of the company.
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