Reportedly the earlier reports had suggested that the government had agreed to a Rs 74,000 crore package to revive the two public sector telecom companies, Bharat Sanchar Nigam Limited (BSNL) and Mahanagar Telephone Nigam Limited (MTNL), it now transpires the Ministry of Finance is not convinced with the revival plan submitted by the Department of Telecommunications (DoT) and has turned it down.
Furthermore the broad contours of the revival plan proposed by the DoT consisted of offering voluntary retirement to a large chunk of the 1.65 lakh employees and releasing funds to buy the 4G spectrum to enable the companies to turn competitive in the market again. DoT had given the financial projections too for BSNL in which it had hoped the company will bring down the losses over 2-3 years and turn profitable by March 2023.
Perhaps of the Rs 74,000 crore, close to Rs 40,000 crore would have been used up in the VRS payouts plus the other retirement benefits and dues to the staff and the remaining amount would have gone towards buying the spectrum and on capital expenses in rolling out the 4G services across the country. Moreover the situation in the Indian telecom industry currently is in such a state of flux that no entity would be willing to invest and take over BSNL and MTNL either.
