BSNL cuts costs, freezes employee benefits, plans to offer VRS

Last year too BSNL had undertaken such a cost cutting exercise and saved Rs 625 crore in employee benefits alone.

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Bharat Sanchar Nigam Limited (BSNL), the State-owned telecommunications company, which has been reporting losses since 2016, is taking severe measures to cut costs in order to survive in the competitive telecom sector. It has frozen employee benefits just like it did last year. In 2018, a similar step had helped BSNL save Rs 2500 crore, of which Rs 625 crore comprised employee benefits alone.

The workforce at BSNL is 1.8 lakh people strong, compared to other private telecom companies in the sector, which have no more than 30,000 employees.

Costs are being cut even in terms of administrative expenditure and electricity, in addition to freezing of employee benefits, such as leave travel expense and even medical expenses.

It is planning to offer a voluntary retirement scheme too, which will impact about 35,000 staff members and incur an expense of Rs 13,000 crore. This cost will be covered with the help of aid from the Government or with a soft loan.

Presently, the telecom sector in India has three private players, that is, Reliance Jio, Bharti Airtel and Vodafone Idea, which account for over 90 per cent of the revenue. With the average revenue per user (ARPU) falling and the mounting losses, BSNL has had to seek new ways of generating revenue and reducing expenditure in order to survive. In trying to maintain its market share by offering competitive tariffs, BSNL had had to face major losses.

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