The Centre is readying a fresh bailout package for cash-strapped Bharat Sanchar Nigam Ltd (BSNL). The move comes almost 10 days after the Prime Minister's Office dashed hopes of a quick revival for the ailing PSU by rejecting a merger plan with its sister firm Mahanagar Telephone Nigam Ltd (MTNL).
According to a report by Business Standard, BSNL has been asked to prepare an asset monetisation plan. For this, the operations could be split into distinct subsidiary bodies. For instance, the operations could be separated for optical fibre assets, fixed line services and broadband services, besides real estate assets.
The report added that government was yet to do a valuation of BSNL's assets, but has assured that this would be at private market rates.
Meanwhile, the department of telecom is negotiating with the departments of revenue and economic affairs and NITI Aayog for loan guarantees to banks for enough money to keep both BSNL and MTNL afloat. The money will be utilised for capex and salary payments. BSNL had raised money in the past, too, to pay salaries. The loans are for the time being for BSNL to survive until it gets a bailout package. In addition, a voluntary retirement package for its employees is also being considered at Rs 6,365 crore.
The move assumes significance as a senior official said that BSNL was facing challenge in crediting staff salaries as on August 30, according to a PTI report. The official mentioned that while the telecom company is generating monthly revenue of about Rs 1,400 crore, there are certain liabilities, including interest payments, which have to be taken into account.
Meanwhile, All India Unions and Associations of Bharat Sanchar Nigam Limited (AUAB) Convenor P. Abhimanyu urged the government to pay back the amount it owes to BSNL. "Government owes BSNL huge amount of money. They have also collected excess amount of around Rs 400 crore per year from BSNL since 2007 in the name of pension contribution".
Distressed telecom PSUs MTNL and BSNL have been incurring losses and have been facing problems in clearing staff salaries in the recent past.
The two PSUs had delayed payment of salaries for February until mid-March due to a financial crisis. BSNL had then said that it used its internal accruals to clear the pending wages.
BSNL's salaries for July, too, were delayed by nearly a week, spilling into beginning of August. On August 5, BSNL confirmed it has released wages of employees for the month of July, after dipping into its internal accruals.
BSNL's loss is estimated to be around Rs 14,000 crore with a decline in revenue to Rs 19,308 crore during 2018-19. BSNL's downward spiral has been attributed to the market capture by Reliance Jio, which has taken the telecom business by a storm.
The public sector firm's provisional loss was Rs 4,859 crore in 2015-16, Rs 4,793 crore in 2016-17, Rs 7,993 crore in 2017-18 and is estimated to swell to Rs 14,202 crore in 2018-19, according to information presented in Parliament.
The number of employees in BSNL stands at 1,65,179 and the total employees' cost is a staggering 75 per cent of the total income of the company. Private players, on the other hand, have very low employee cost ratio; the proportion of employee expenses hovers between 3-5.5 per cent for some of the major operators.