New Delhi, July 03 (HS): The government is in process of providing bailout or revival package to the state owned telecommunication companies – Mahanagar Telephone Nigam Ltd (MTNL) and Bharat Sanchar Nigam Ltd (BSNL) according to sources. This revival package by government amounts to Rs. 74,000 crore for these loss making companies.
The package amount of Rs. 20,000 crore will be allocated for 4G spectrum of these companies and Rs. 40,000 crore for will be allocated for Voluntary Retirement schemes of employees and other ex-gratia payments. The remaining funds of Rs. 13,000 will be kept for acquiring assets. This revival plan will also include matters related to sale of assets of these telecom majors like towers, land bank and optical fibre, and lowering the age of VRS by 2 years.
According to sources, Department of Telecommunication is of the view that revival plan costing approximately Rs. 1.2 lakh crore is better than any divestment plan for these PSUs seeing financial pressure. It also suggested joint venture between these telecom majors.
It is noteworthy that these two government owned companies are not competitive enough to survive in the market due to lack of upgradation, poor management and high costs. It is far behind private players in getting average revenue per user.