Ministers Discuss BSNL and MTNL Revival Plan With Focus on Land and Asset Monetisation

BSNL and MTNL have been financially strapped since the data tariff war, and now the government is deciding on a revival package for the two companies

By July 17th, 2019 AT 11:52 AM
  • The GoM will decide on VRS for BSNL and MTNL employees
  • The likely monetisation plan will include liquidation of assets and lands

Caught amidst distressing financial troubles, the state-led telecom operator, Bharat Sanchar Nigam Limited (BSNL) has been searching for a way to revive itself. The government has also been ideating on the revival plans of BSNL and MTNL and has already eliminated a few options which won’t be appropriate for the telecom operator. However, on Tuesday the group of ministers (GoM) headed by the Home Minister Amit Shah discussed whether the voluntary retirement scheme (VRS) could be extended to BSNL employees along with the 4G airwaves. This report came from ET Telecom, and the GoM might likely decide on a possible move to help the financially troubled telecom operator to climb out of the trenches.

VRS Package for Employees of BSNL

The group of ministers which discussed the revival plans of BSNL and MTNL included IT and law minister Ravi Shankar Prasad, and finance minister Nirmala Sitharaman besides Home Minister Amit Shah. The sources aware of the development remarked that during the two hours meeting of the ministers, the officials discussed the likely ways of the revival of BSNL and MTNL which included options like land monetisation and building assets to fund the VRS of employees willing to opt for it. To recall, the finance ministry has already earlier proposed a VRS package worth Rs 6,365 crore to BSNL, and Rs 2,120 crore to MTNL.

The centre is also rooting for operational synergy between the two state-led telecom operators, BSNL and MTNL to save on operational costs. It is worth noting that MTNL offers services in two metro cities – Delhi and Mumbai, whereas BSNL provides its services in the rest of the country. The main cause for financial troubles for both the telecom operators is that the revenue to wage ratio of both of these companies is much higher as compared to the private telcos operating in the industry. The lack of 4G airwaves, because of which both the telcos haven’t been able to start providing 4G services at scale is also another factor why the two companies are witnessing a steep decline in revenue.

4G Spectrum Cost for BSNL to Go as High as Rs 14,000 Crore

If the 4G spectrum is allocated administratively to BSNL, then it will cost the government Rs 14,000 crore, whereas for MTNL the cost would run up to Rs 6,000 crore. Sandeep Aggarwal, PHD Chamber of Commerce & Industry Telecom Committee Chairman said, “The government should immediately look at assets monetisation strategies including towers and fibre to make BSNL and MTNL stay afloat.”

The real estate assets, fibre optic network and mobile towers of BSNL and MTNL combined are pegged at Rs 1.10 lakh crore, Rs 60,000 crores and Rs 35,000 crores. According to Aggarwal, this amount can be used to extend VRS to the employees, for 4G and 5G airwaves and the operational expense of the telcos as well.

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Arpit spends his day closely following the telecom and tech industry. A music connoisseur and a night owl, he also takes a deep interest in the Indian technology start-up scene and spends rest of his time spilling poetry and stories on paper.

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