Mahanagar Telephone Nigam Limited (MTNL), a state-run telecom company that operates in Mumbai and New Delhi is expected to see some downsizing in the employee force. The government is reportedly planning to send 3000 employees from MTNL to BSNL (Bharat Sanchar Nigam Limited) and the Department of Telecommunications (DoT). Alongside this, the government is also planning to offer VRS (voluntary retirement scheme) to employees.
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According to a report from the Financial Express, this is being done to reduce employee costs due to a lack of funds. The entire operations of MTNL will anyway be shifted to BSNL in the future. The government is currently working on restructuring the debt of MTNL. Once that is done, MTNL will only be a brand that exists in the backend because the entire operations will be run by BSNL.
For MTNL, the employee costs which include not just salaries, but also other benefits, accounted for 78% of its operating revenue of Rs 728.5 crore. BSNL is currently working on launching high-speed networks in Mumbai and Delhi as well. For the unaware, the mobile networks of MTNL have been managed by BSNL for a few years now. The Department of Telecommunications has already confirmed that BSNL is testing 5G in multiple parts of the country, including Delhi.
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This is not the first time the government is considering offering VRS to BSNL/MTNL employees. As part of relief packages, this has been done before. The goal of the government is to streamline operations and make BSNL a profitable company as fast as possible. The merger of BSNL and MTNL would be too complex to handle and that would also add more pressure on BSNL to reach a point of profiability. Thus, there will be no merger, instead, the government will be handing over MTNL operations to BSNL.
