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NEW DELHI: The Department of Telecommunications ( DoT ) is expected to seek the Ministry of Finance approval for the second voluntary retirement scheme (VRS) targeting nearly 35% of the existing Bharat Sanchar Nigam Limited ( BSNL ) workforce to further improve the balance sheet. “BSNL board has approved and sent a proposal to reduce employee base by 18,000 to 19,000, to the telecom department through voluntary retirement scheme (VRS) to make balance sheet healthy," a source told ETTelecom. The state-run telco proposed the retrenchment scheme following instructions from the Ministry of Communications, which after receiving a nod from Nirmala Sitharaman-headed Ministry of Finance, is likely to table it to the Cabinet for mandatory approval.
Advt On Monday, the BSNL board approved a voluntary program to further save on employee wages outgo in the absence of commercial high-speed fourth-generation (4G) data services. State-driven telco has sought Rs 15,000 crores to meet VRS expenses, according to a person privy to the matter. "VRS is currently under internal discussions, and no tangible decision has been made yet," a senior BSNL official told ETTelecom, on a condition of anonymity.
The public telecom entity spends nearly Rs 7,500 crores -- or about 38% of its revenue -- to meet employee salaries which it plans to cut down to about Rs 5,000-crore a year. The query to BSNL did not elicit any response. BSNL's revenue stood at Rs 21,302-crore in FY 2023-24, which improved marginally compared to the previous year.
The company's headcount includes more than 30,000 non-executives and 25,000 executives. In 2019, Prime Minister Narendra Modi-headed government approved a mega Rs 69,000-crore revival plan that included a rollout of an early retirement program for both BSNL and Mahanagar Telephone Nigam Limited (MTNL) employees, with as many as 93,000 opting for the separation scheme. The ex-gratia component of the VRS stood at about Rs 17,500 crores towards the cost of pension, gratuity and commutation.
Advt MTNL, however, operates only in Delhi and Mumbai metropolitans with its mobile network being managed by Robert Ravi-headed BSNL. The turnaround package also included asset monetisation and 4G spectrum allocation to both public sector telecom carriers. Telco’s asset monetisation continued to face regulatory and bureaucratic hurdles.
Following the VRS, as a part of a much-sought recovery plan, the telco’s reduced workforce had to face salary delays for a few months. In 2022, the Centre approved a second revival package for BSNL and MTNL amounting to Rs. 1.
64 lakh crores that included financial support for de-stressing the balance sheet, capital expenses, settlement of Adjusted Gross Revenue (AGR) dues, and viability gap funding (VGF) for rural landline connections. In 2023, Rs 89,000-crore worth of another revival plan, a third in four years. was approved by the Cabinet for the allocation of 4G and 5G spectrum, with an ambition to offer commercial data services, fixed wireless access (FWA) and Captive Non-Public Network (CNPN).
By Muntazir Abbas , ETTelecom Published On Dec 27, 2024 at 05:14 PM IST Telegram Facebook Copy Link Be the first one to comment. Comment Now COMMENTS Comment Now Read Comment (1) All Comments By commenting, you agree to the Prohibited Content Policy Post By commenting, you agree to the Prohibited Content Policy Post Find this Comment Offensive? Choose your reason below and click on the submit button. This will alert our moderators to take actions REASONS FOR REPORTING Foul Language Defamatory Inciting hatred against a certain community Out of Context / Spam Others Report Join the community of 2M+ industry professionals Subscribe to our newsletter to get latest insights & analysis.
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