The government has said that it has no plan to shut down loss incurring Bharat Sanchar Nigam Limited (BSNL) and Mahanagar Telephone Nigam Limited (MTNL).
As per government estimates, BSNL’s losses increased from Rs 149.04 billion in 2018-19 to Rs 155 billion in 2019-20. Meanwhile, MTNL’s losses increased from Rs 33.98 billion in 2018-19 to Rs 38.11 billion in 2019-20.
Earlier in October 2019, the government had announced a revival package of around Rs 690 billion.
The revival plan entails reduction in employee costs through a voluntary retirement scheme (VRS) for the employees of age 50 years and above, administrative allotment of spectrum for 4G services with funding through budgetary allocation and debt restructuring by raising of sovereign guarantee bonds.
It also includes monetisation of assets to generate resources for retiring debt, capital expenditure and other requirements, and in-principle approval for merger of BSNL and MTNL.
The government has provided sovereign guarantees worth Rs 85 billion and Rs 65 billion to BSNL and MTNL, respectively.
While BSNL has raised Rs 85 billion at a coupon rate of 6.79 per cent per annum, MTNL has raised Rs 43.61 billion at a coupon rate of 7.05 per cent per annum and Rs 21.39 billion at coupon rate of 6.85 per cent per annum in two tranches.
