No decision taken in GoM's meet on revival of BSNL, MTNL

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A panel of ministers today discussed the VRS proposal for BSNL employees among other issues for revival of state-run telcos, but no decision was taken.

"No decision yet," Telecom Minister Kapil Sibal told reporters here after a meeting of the Group of Ministers (GoM) on revival of BSNL and MTNL.

The GoM, headed by Finance Minister P Chidambaram, is likely to meet again in a week's time.

In a bid to bring down the salary burden, BSNL had proposed letting go one lakh employees by offering them voluntary retirement scheme (VRS).

According to sources, the likely expenditure on ex-gratia for approximately 1 lakh employees is estimated to be about Rs 11,276 crore. In addition, there will be expenditure on normal retirement benefits, including gratuity, pension, leave encashment and transfer grant.

Sources said the GoM was to discuss about hiving off tower assets of BSNL into a separate company. It could not be, however, confirmed if the issue was taken up for discussion or not.

BSNL has over 60,000 towers across India. It also has tower sharing pacts with many private operators.

As part of its revival plan, BSNL is banking on growth in broadband services, which include setting up wi-fi hot spots. The telco excepts to garner a revenue of Rs 8,984 crore in the next five years from this segment.

The revival proposals also include utilisation of real estate, utilisation of factories for revenue generation and providing broadband connectivity to schools.

The GoM had already decided on pension issues plaguing both the public sector units. The GoM had decided on refund of Rs 11,000 crore MTNL and BSNL paid for wireless broadband spectrum.

The GoM also decided that the government would bear pension load that MTNL pays to its about 43,000 employees absorbed from the Department of Telecom (DoT).

The pension proposal of MTNL was approved by Cabinet recently that would cost the government an estimated Rs 500 crore a year.

The DoT had placed various issues for GoM for improving condition of these PSUs which include synergy between the two companies, waiver of one-time spectrum charges which amounting to about Rs 10,000 crore, waiving around Rs 980 crore principal amount of notional loan amount outstanding against BSNL etc.

In 2012-13, MTNL recorded a net loss of Rs 5,321.12 crore on annual revenue of Rs 3,428.6 crore whereas BSNL's losses, as per unaudited results, stood at Rs 8,198 crore for 2012-13, compared Rs 8,851 crore posted in 2011-12.

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