Cabinet is expected to meet in the first week of October to officially clear the recommendations given by the Group of Ministers (GoM) for the State run telecom operators, Bharat Sanchar Nigam ltd (BSNl) and Mahanagar Telephone Nigam ltd (MTNl).
GoM recommended that the Government should pay the pension of MTNl employees, which costs Rs570 crore annually. Apart from that they also allowed the refund of money to the two for surrendering broadband wireless access (BWA) spectrum worth nearly Rs12,000 crore.
As per official sources, after the GoM’s recommendations, the proposal pertaining to the pension issue would be sent to the Cabinet which is expected to meet in the first week of October. The source further added that it is very likely that the Cabinet would give its nod to the proposal giving Rs570 crores to MTNl. The company has been bearing the burden of employee pension payments since 1986 even though it was the responsibility of the Government.
Apart from that, the proposal for surrender of BWA spectrum would also be put up before the Cabinet. Once this is cleared, MTNl would receive a refund of spectrum fee worth Rs5,700 crore while BSNl would get nearly Rs6,724 crore. The two PSUs had forwarded their request to the Government to refund the amount they paid in 2010 for spectrum, used to provide 4G data services.
There is more good news for BSNl, as the department of telecom is working on the proposal of monitisation of its land assets. BSNl currently holds properties worth thousands of crore in 3,500 towns. Official source also said, the telecom department would present the proposal for land monetisation of BSNl infront GoM which is expected to meet by October mid
Both, MTNl and BSNl have registered huge losses in FY13. MTNl’s total loss for the previous fiscal stood at Rs5,321.12 crore and BSNl reported unaudited net loss of Rs8,198 crore in the financial year 2013.
The biggest reason that has been putting pressure on the finances of both companies has been the high employee salaries. In total, both employee wages and pension expenses of MTNl are at 103 per cent of its revenue while for BSNl it stands at 49 per cent.
After a clearance of the refund of the BWA spectrum fee and also the pension payments, both the companies would have enough funds to turn their respective financial performance upside down.