Prasad orders BSNL, MTNL to proceed quickly in VRS, asset monetization plans

New Delhi, November 3 () Telecommunications Minister Ravi Shankar Prasad ordered BSNL and MTNL to quickly implement VRS guidelines and initiate proactive measures to monetize assets temporarily, making it clear that they should be more aggressive in Telecommunications market, sources said.

A government development official said the minister who met with the BSNL and MTNL boards categorically told companies that the government had given them a strong incentive package and now they must get down to work to be more competitive.

It should be remembered that the government approved last month a reactivation package of Rs 69,000 crore for BSNL and MTNL that includes the merger of the two companies with losses, monetizing their assets and giving VRS to the employees so that the combined entity becomes profitable in two years.

In chairing a meeting on November 1, it is also known that the minister ordered companies to quickly finalize the voluntary retirement scheme (VRS) guidelines and implement them in the most proactive manner, whose progress will now be directly monitored by him.

The sources said the minister also told BSNL and MTNL that they should visit the field to interact with their officers and employees. Proactive measures to monetize assets should also be initiated as soon as possible, it is said that the minister informed them.

The sources said the minister also made it clear that with the generous government package, BSNL and MTNL must comply in terms of performance.

The Union Cabinet headed by Prime Minister Narendra Modi had approved on October 23 a plan to combine Mahanagar Telephone Nigam Ltd (MTNL), which provides services in Mumbai and New Delhi, with Bharat Sanchar Nigam Ltd (BSNL) that provides services in the rest of the NATION.

The approved rescue package includes an infusion of Rs 20,140 million rupees for the purchase of 4G spectrum, Rs 3,674 million rupees for GST to be paid in the allocation of the spectrum, companies that collect Rs 15,000 crore in debt with the sovereign guarantee and government funds Rs 17,160 crore for VRS and another Rs 12.768 crore towards retirement responsibility.

The product of the issuance of sovereign bonds will restructure the debt and cover other expenses. The bond must be attended only by public sector companies. The main responsibility will fall to BSNL since MTNL will now operate as a subsidiary of the company.

The two companies will monetize assets worth Rs 37,500 crore in the next three years, Prasad said. MTNL has reported losses in nine of the last 10 years and BSNL has also been recording losses since 2010. The total debt of both companies amounted to Rs 40,000 crore, of which half of the responsibility is only in MTNL. MBI HRS