With the general elections approaching, the Group of Minister (GoM) meeting scheduled on January 8 is critical for Bharat Sanchar Nigam limited (BSNl) as it is waiting for GoM's approval to initiate its revival. Going through financial crisis, the State run operator has sent a letter to Department of Telecommunications (DoT), informing that the company has appointed Deloitte to craft a detailed revival plan for it. Earlier, GoM in its September 12 meeting, had asked BSNl to present a revival plan.
"BSNl in its letter has said that Deloitte would prepare a revival proposal for the company and would submit it in the next 120 days," said an official source. Since, the upcoming GoM meeting is expected to be the last meeting before general election, source added, "The upcoming meeting is very important for BSNl as DoT would table BSNl's letter along with other revival proposals before GoM."
Along with the letter, the department would also present a special Voluntary Retirement Scheme (VRS) in order to reduce the State run telecom operator's salary burden. Talking about the VRS plan, official source said, "In the next 7 years nearly 1 lakh employees of BSNl would retire and through VRS plan, DoT plans to reduce the employee strength in a shorter span of time and help reduce the tune of salary payments BSNl is currently doing."
Also, DoT would also table the land monitisation proposal as BSNl holds assets worth thousands of crore in over 3,500 towns of the country out of which DoT plans to liquidate some parcels of land to generate additional funds for the company.
Another proposal before GoM for approval would be of separating BSNl's tower business into a new entity which would be the wholly owned subsidiary of the public sector operator. The company currently has 65,000 towers across the country and like other telecom operators, DoT plans to utilize this tower network for generating revenues though outsourcing towers to other operators on sharing basis.
As per DoT, the total asset base of the new proposed company would be around Rs 7,226.3 crore, with fixed assets of Rs 6,517.4 crore. The new company should be set up with an equity component of Rs 3,000 crore and a cash reserve of Rs.1,076.3 crore, after adjusting for debt and the capital restructuring, as per DoT's proposal .
BSNl reported a loss of Rs 7,884 crore for the financial year 2012-13 (FY13). This was BSNl's fourth straight loss making fiscal, although the losses have improved 10.93% from Rs 8,851 crore loss in the previous fiscal FY-12. The telecom operator had last reported a profit of Rs 575 crore in FY09. In subsequent years, it has reported losses of Rs 1,823 crore in FY-10 and Rs 6,384 crore in FY-11.