Loss-making MTNL and BSNL get Rs 69K crore boost
Government announces a merger of two firms, a revival package, allocation of 4G spectrum and 'attractive Voluntary Retirement plan for the employees'
New Delhi: The Centre on Wednesday approved a RS 68,751-crore revival package for loss-making BSNL and MTNL, including 4G spectrum allocation and voluntary retirement scheme for staffers in the age bracket of 50 to 53.5 years, and their merger.
The Union Cabinet also approved merger of the state-owned telecom firms and till the completion of the process, MTNL will operate as a subsidiary of BSNL, Telecom Minister Ravi Shankar Prasad said here while sharing details of the revival package.
The package includes raising of Rs 15,000 crore sovereign bonds to meet the immediate capital requirement of both the companies, 4G spectrum allocation worth Rs 20,140 crore, Rs 29,937 crore for VRS covering 50 per cent of their employees, and Rs 3,674 crore for goods and services tax that will be levied on allocation of radiowaves.
"The VRS package will give eligible employees 125 per cent of income that they would have earned by serving the company till the age of 60 years. With this decision, we have taken care of the interest of lakhs of employees of these PSUs," Prasad said.
BSNL has around 1.68 lakh employees and MTNL around 22,000. "The VRS is voluntary; nobody can be forced to opt for it," Prasad said. The total debt on both the firms stood at R40,000 crore, of which half of the liability is on MTNL alone which operates in Delhi and Mumbai.
Both the companies have been demanding spectrum to start 4G services to remain competitive in the market. Telecom Secretary Anshu Prakash said the spectrum will be allocated to both the companies administratively within a month. The Centre will monetise MTNL and BSNL assets worth R37,500 crore over a period of three years. "The assets primarily include land assets but also rental and leasing of their buildings," Prakash said.
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