BSNL and MTNL to be merged, Cabinet approves VRS package for employees

There is expected to be a revenue impact of Rs 6,365 crore and Rs 2,120 crore, respectively, as a result of the VRS schemes to be offered to the staff of the two companies.


As part of the rescue plan to revive Bharat Sanchar Nigam (BSNL) and Mahanagar Telephone Nigam (MTNL) the Governemnt has decided to merge the two entities and also offer its employees an early retirement plan to cut costs.

BSNL presently has a workforce strength of 1.76 lakh, while MTNL has 22,000, across India. It is estimated that 16,000 MTNL employees and half of BSNL staff will retire in the next five to six years. A revenue impact of Rs 6,365 crore and Rs 2,120 crore is expected due to the VRS schemes being offered to BSNL and MTNL employees, respectively.

Ways are also being looked into to make use of the land assets of the two companies. The merger and revival plan will involve ? 56,000 crore, and has been approved by the Cabinet.

The two companies will be allotted spectrum for 4G services at the prices that prevailed in 2016. The Government will bear the cost of the same, and also issue sovereign bonds worth Rs 15,000 crore to be serviced by the two companies. Monetisation of assets worth about Rs 38,000 crores is also being planned over the next few years.

The Government of India will be investing in these PSUs to fund the 4G spectrum. The goods and services tax (GST) amount of ?3,674 crore will also be borne by the Government.

For some time now, MTNL and BSNL have been suffering losses and have been struggling to clear staff salaries. In fact, the salaries for September were paid with great difficulty very recently.

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