BSNL, MTNL crisis: Next government to take up revival plan

The Ministry of Finance has requested the Department of Telecommunications (DoT) to re-examine the revival proposals for Bharat Sanchar Nigam Limited (BSNL) and Mahanagar Telephone Nigam Limited (MTNL). The ministry has asked the telecom department to submit reworked proposals to the new government, which will take charge after the Lok Sabha elections.

According to a senior official, this indicates that there is no immediate move to revive the central public sector enterprises (CPSEs) until a new government settles down.

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The DoT, last month, floated a draft for consultation among ministries on the revival of telecom firms. The Finance Ministry, in response, asked the DoT to rework the proposals. The revival proposal's key issues are - voluntary retirement scheme (VRS) and 4G spectrum allocation. Under the VRS scheme, BSNL will have a revenue impact of Rs 6,365 crore and MTNL Rs 2,120 crore.

Both Finance Ministry and DoT expect that there may not be any need for financial support to the companies for VRS as the telcos' employees are covered by the government pension rules, the official added. Both MTNL and BSNL have been moved out of DoT.

However, the 4G spectrum allocation has been left for the next government to consider, the official said. Both, BSNL and MTNL have sought 4G spectrum services through equity infusion from the centre.

BSNL, which has the lowest debt among all telecom operators, has sought 4G spectrum across the country through Rs 7,000 crore equity infusions. The spectrum's total cost will be Rs 14,000 crore.

Additionally, it is to yet to be decided that between the DoT and the Department of Investment and Public Asset Management (DIPAM), who will conduct the mutation process involved in monetising assets.

(With agency inputs)

(Edited by Vivek Dubey)

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