Both BSNL and MTNL have a high revenue-to-wage ratio. BSNL has a headcount of 163,000 while MTNL employs 22,000 workforce.
NEW DELHI| On Wednesday Cabinet has finally approved the revival package for the two Bharat Sanchar Nigam Limited (BSNL) and Mahanagar Telephone Nigam Limited (MTNL) in a press meet.
Union Minister Ravi Shankar Prasad: Neither MTNL or BSNL are being closed, nor being disinvested, nor is being hired to any third party. pic.twitter.com/Zbnqg4bJhy
— ANI (@ANI) October 23, 2019
Cabinet has decided to merge MTNL with BSNL as part of a revival package that includes raising sovereign bonds, monetizing assets and voluntary retirement scheme (VRS) for employees. MTNL will act as a subsidiary of BSNL.
The government has programed Four-step revival plan for both the companies. Telecom Minister Ravi Shankar Prasad said they want to make these companies more competitive by putting Rs 29,937 crore.
The Narendra Modi government has agreed to stimulus worth Rs 15,000 crore through supreme bond. “Assets worth Rs 38,000 crore will be monetized in four years,” Prasad added.
Following Tuesday’s late evening intervention by the Prime Minister Office (PMO), the Department of Telecommunications has sent the note to the Cabinet without the Ministry of Finance response.
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The department was, however, seeking comments from MoF in respect to the Cabinet memo circulated to the nodal ministries.
The ministry, however, previously opposed any financial backing to state-driven telcos, and added that any upfront support to BSNL and MTNL would be a huge burden on the budgetary resources of the government.
The revival package for the two financially-stressed state-owned operators include voluntary retirement scheme (VRS), administrative allocation of 4G spectrum and assets monetization, to make them financially sustainable and competitive.
Union Cabinet approves revival plan of BSNL (Bharat Sanchar Nigam Limited)&MTNL (Mahanagar Telephone Nigam Limited)&in-principle merger of the two. Spectrum of 4G to be allocated to Telecom PSEs (Public Sector Enterprises).VRS (voluntary retirement scheme) packages to be offered. https://t.co/KluEorlN9A
— ANI (@ANI) October 23, 2019
Both BSNL and MTNL have a high revenue-to-wage ratio. BSNL has a headcount of 163,000 while MTNL employs 22,000 workforce.
In August, the PMO has asked the DoT to provide details on steps taken to monetize assets, and directed the department to prepare a list of assets to be leveraged in a time-bound manner.
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