BSNL and MTNL Asked to Explain the Turnaround Strategy by DCC for Financial Support

The Digital Communications Commission (DCC) on Thursday asked loss-making telecom PSUs BSNL and MTNL to explain their turnaround strategy and give an assurance to achieve higher revenue for getting financial support, an official said. Public sector firms BSNL and MTNL have sought financial support, 4G spectrum and approvals for asset sales as part of their revival plans. “DCC members wanted to know what is the revival plan, when will these (BSNL and MTNL) companies come back to health, how will they ensure that if they are given all the support, how exactly the commission can foresee that they will achieve higher revenue,” an official source said after the meeting.

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MTNL has sought a refund of interest that it paid for broadband wireless access spectrum which it was given by the government and asked to pay the price that was determined in auctions held in 2010. Both state-run telecom firms have asked for permissions to monetise their land assets as well as the voluntary retirement scheme for employees on the Gujarat model. Under the Gujarat model, an amount equivalent to 35 days of salary for each completed year of service, and 25 days of salary for each year of service left till retirement is offered.

The VRS scheme for BSNL and MTNL will have a revenue impact of Rs 6,365 crore and Rs 2,120 crore respectively. Both the companies have also sought spectrum for 4G services through equity infusion from the government.