Telecom Commission gives nod to VRS for MTNL employees

By May 2nd, 2016 AT 1:07 PM

Telecom Commission on Saturday has given its nod to a proposal to provide voluntary retirement scheme (VRS) to employees at state-run telecom telco, MTNL. The move is aimed at reviving the loss making telco which has been losing revenue of up to Rs 2000 crore per year.

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MTNL has 40,000 employees, which leads to massive employee cost for the state owned PSU. The telco’s employee cost is 78% of the revenue, according to media reports.

The VRS scheme has been offered for three months, for 25% of their people above 50 years of age. The cost outgo for 20% employees above 50 years of age – about 5300 employees – amounts to Rs 2,000 crore, including an ex-gratia of Rs 1000 crore, according to an Economic Times report.

The money saved from this exercise will be used for paying annual maintenance costs (AMC), servicing equipment or buying new equipment, which will contribute to improving quality of service, which at present is a pain point for the telco.

In addition, the Telecom Commission, which is the highest decision body in the telecom department, has proposed steps to increase MTNL’s revenue generating streams by monetizing is assets. The steps include sharing its optic fibre, telecom towers and giving its buildings on rent.

The asset monetization process will lead to saving as Rs 300 crore a year.

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Passionately following the Indian #Telecom Industry for over a decade from Business, Consumer and a Technical perspective. My primary focus area is Consumer & Digital Experience.

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