New Delhi: The government on Wednesday approved a Rs 68,751-crore revival package for loss-making BSNL and MTNL, including 4G spectrum allocation and voluntary retirement scheme, as well as their merger.
The Union Cabinet also approved the merger of the state-owned telecom firms. Till the completion of the process, MTNL will operate as a subsidiary of BSNL, Telecom Minister Ravi Shankar Prasad said.
The package includes raising of Rs 15,000 crore sovereign bonds to meet the immediate capital requirement of both the companies, 4G spectrum allocation worth Rs 20,140 crore, Rs 29,937 crore for VRS covering 50 per cent of their employees, and Rs 3,674 crore for goods and services tax that will be levied on the allocation of radiowaves.
"In case of BSNL and MTNL, the government's view is clear. These are strategic assets of India. BSNL maintains the entire army network.
"The VRS package approved by the Cabinet will give eligible employees 125 per cent of income that they would have earned by serving the company till the age of 60 years. With this decision, we have taken care of the interest of lakhs of employees of these PSUs," Prasad said.
BSNL has around 1.68 lakh employees and MTNL around 22,000.
"The VRS is voluntary; nobody can be forced to opt for it," Prasad said.
The total debt on both the companies stood at Rs 40,000 crore, of which half of the liability is on MTNL alone which operates in Delhi and Mumbai.
Both the companies have been demanding spectrum to start 4G services to remain competitive in the market.
Telecom Secretary Anshu Prakash said the spectrum would be allocated to both the companies administratively within a month.
"The spectrum allocation to BSNL worth Rs 14,115 crore will be in lieu of equity shares and about Rs 6,295 crore for MTNL in place of preferential shares," Prakash said.
The government will monetise MTNL and BSNL assets worth Rs 37,500 crore over three years.