Capital infusion from Centre likely for BSNL, MTNL: Reports

BSNL and MTNL may also soon receive their long-awaited share of 4G spectrum

bsnl The BSNL employees strike has been deferred to December 10

According to an IANS report, the government is soon likely to infuse capital into MTNL and BSNL, with the Union Cabinet to take a decision soon on 4G spectrum allocation to them.

The cabinet will take up the matter of 4G spectrum allocation by the third week of September after the Department of Telecom (DoT) places the note before it for consideration. The cost of allocating spectrum to them will be Rs 20,000 crore, with Rs 14,000 worth being sought by BSNL and Rs 4,000 worth by MTNL.

According to the report, the infusion of capital would take place via bonds in the same way that PSUs were recapitalised earlier.

The news comes a week after reports emerged that the Centre was preparing a bailout plan for the cash-strapped telecom PSUs. In August, the Prime Minister’s Office rejected a proposal to merge BSNL and MTNL, following which BSNL was asked to prepare an asset monetisation plan.

MTNL had been unable to pay its employee’s salaries for two months, with the same accounting for 87.15 per cent of its income. BSNL too has not paid 1.76 lakh of its employee salaries in August. BSNL’s financial problems stem from the lack of 4G services on offer, overstaffing (BSNL and MTNL’s employee costs are 75.06 and 87/15 of total income, while private telecom companies have the same in the range of 2.9 to five per cent) and immense debt.

Posited solutions ranged from implementing a Voluntary Retirement Scheme (VRS) to auctioning its land assets worth one lakh crore rupees. BSNL has also sought to aggressively recover over Rs 3,000 crore due to it from various clients.

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