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<ul><li>The central government is working on a ₹ 740 billion bailout proposal for loss making state-owned firms BSNL and MTNL. </li><li>The proposal includes an exit package for the Voluntary Retirement Scheme (VRS), an additional 5% compensation, along with providing for the <keyword id="122479" type="COMPANY" weightage="20" keywordseo="4G">4G</keyword> spectrum and capital expenditure. </li><li>BSNL at an estimated loss of ₹138.04 billion is country’s biggest state-owned loss maker, while MTNL stands at third after <keyword id="2573" type="COMPANY" weightage="20" keywordseo="Air-India">Air India</keyword>, at ₹ 33.98 billion loss. </li></ul>The central government is working on a ₹ 740 billion bailout plan for <keyword id="57998" type="COMPANY" weightage="20" keywordseo="Bharat-Sanchar-Nigam-Limited">Bharat Sanchar Nigam Limited</keyword> (BSNL) and Mahanagar Telecom Nigam Limited (MTNL), the two state owned telecom companies, which are continuing on their decade long downtrend, <a href="https://timesofindia.indiatimes.com/business/india-business/government-proposes-rs-74000-crore-bailout-for-bsnl-mtnl/articleshow/70048935.cms">Times of India reported</a>. The proposed bailout plan includes an exit package for thousands of employees, which includes an additional 5% compensation as an ex-gratia amount for the Voluntary Retirement Scheme (VRS). The plan also provides for growth with amounts earmarked for 4G spectrum, and capital expenditure. Top loss makers BSNL and MTNL are among the country's biggest loss making state owned entities. The top spot went to BSNL which has an estimated loss is at ₹ 138.04 billion. The third spot is occupied by MTNL after Air India, as its losses are at ₹33.98 billion. MTNL provides telecom services in Mumbai and Delhi, while BSNL provides it in rest of the country. The ministry of telecommunications’s proposal seeks revival of both the firms from other ministries. In response, the Ministry of Finance had asked the Department of Telecommunications to rework the proposals. Competitive Strength One of the plans is for the government to modernise these state-owned firms, so that they can compete with the aggressive players in the market like Reliance Jio, Airtel and Vodafone Idea. If it is passed, the government will allot the 4G spectrum which is valued at ₹ 200 billion and the rollout cost which is ₹ 130 billion will be paid by the PSUs, as per reports. BSNL and MTNL have lost market share in the mobile services business and their Average Revenue per user (<a href="https://www.thehindubusinessline.com/opinion/columns/slate/all-you-wanted-to-know-about-arpu/article9562345.ece">ARPU</a>) is a meagre ₹38 compared to ₹70 of private telecom entities. This trend has continued in the last one decade owing to poor management, high staff cost, government’s unwanted intervention and the very slow rate of technology upgradation. Shutting down costlier The department of telecom had argued in favour of the bailout plan proposal, saying that shutting down the PSUs will cost the government ₹1.2 trillion. As a plan for divestment in these companies might be delayed due to stressed telecom market, they might now look at joint ventures as an option. The government is also considering bringing the retirement age from 60 to 58 to bring down the costs of companies and reduce their losses. SEE ALSO: <a href="https://www.businessinsider.in/the-fate-of-180000-bsnl-unpaid-employees-hangs-in-balance-as-fears-of-a-shutdown-loom-large/articleshow/69954923.cms">The fate of 180,000 BSNL unpaid employees hangs in balance as fears of a shutdown loom large</a>

BSNL and MTNL may shed flab and get 4G spectrum as a part of the proposed ₹740 billion bailout plan

<ul><li>As many as 15,000 employees enrolled in the scheme on the very first day. </li><li>Eligible employees are keen on enrolling for the scheme as rumours that the company capped the VRS packages for 80,000 employees — is doing the rounds. </li><li>The VRS scheme will be available till December 3, 2019 till 5:30 pm. </li><li>After implementing the bailout package for BSNL and MTNL, the union government plans to trim the retirement age of employees to 58 years.</li></ul>Employees at BSNL who have been receiving their salaries two weeks late for the last few months are rushing to apply for the Voluntary Retirement Scheme (VRS) package offered by the company. As many as 15,000 employees enrolled in the scheme on the very first day on November 6, according to sources. Two days back, the debt-ridden telco announced VRS for employees aged 50 and above. Eligible employees are rushing in to apply for the scheme as rumours that the company capped this offer for 80,000 employees only — is doing the rounds. While the telecom player has around 176,000 employees, as many as 106,000 fall under the eligibility age. The telco was hoping that 80% of the employees would opt for VRS. “The number of persons in the organisation are far higher than the competitors. We are looking forward to reduce 70,000 to 80,000 employees, and make it attractive for the employees, so that they can see value in the VRS," Pravin Kumar Purwar, Chairman of BSNL <a href="https://www.businessinsider.in/bsnl-which-is-yet-to-pay-august-salaries-wants-to-give-an-attractive-retirement-package-to-80000-employees/articleshow/70988909.cms" data-type="tilCustomLink">said </a> a few months back. Even after the scheme is implemented, the telco will have 100,000 employees on its rolls. Reducing headcount is important for both BSNL and MTNL who are being dragged down by debt. As the government is implementing the rescue package, both these state-owned companies which will be merged — want to modernise processes and get ready to compete in the market. The VRS scheme will be available till December 3, 2019 till 5:30 pm. The government will infuse a total of ₹29,900 crore for VRS settlements and retirement liabilities of BSNL and MTNL. MTNL too announced the same scheme on November 3. After implementing the bailout scheme for BSNL and MTNL, the union government plans to trim the retirement age of the employees to 58 years. The current age for retirement is 60 years. Last month, the government decided to <a href="https://www.businessinsider.in/policy/news/bsnl-and-mtnl-will-be-merged-and-employees-will-be-offered-voluntary-retirement-as-part-of-revival/articleshow/71721917.cms">merge</a> BSNL and MTNL. While the merger will take some time to be implemented, MTNL will be considered as a subsidiary of BSNL till then. In 2019, BSNL’s revenues dipped and the accumulated losses stood at ₹14,000 crore while MTNL posted a loss of ₹3,388 crore. See also: <a href="https://www.businessinsider.in/business/news/bsnl-and-mtnl-vrs-package-announced-121000-employees-are-eligible/articleshow/71920815.cms">BSNL’s VRS package is out and valid till December 3 — and over half of all employees are eligible</a> <a href="https://www.businessinsider.in/careers/news/100000-people-working-with-bsnl-vendors-are-likely-to-go-empty-handed-even-as-the-government-compensates-the-employees/articleshow/71916430.cms">100,000 people working with BSNL vendors are likely to go empty handed</a> <a href="https://www.businessinsider.in/business/startups/news/bsnl-and-mtnls-74000-cr-plan-involves-purchasing-4g-spectrum-fees-and-vrs/articleshow/71705375.cms">BSNL and MTNL's ₹74,000 cr plan involves purchasing 4G spectrum fees and VRS</a>

Over 15,000 BSNL employees rush to opt for VRS package on day one

New Delhi, Nov 18 () The government should grant telecom companies a three-year moratorium followed by an extended timeline for payment of all statutory dues at easier interest rates, as the telecom sector is reeling under massive losses after the Supreme Court ruling on AGR liabilities, COAI said on Monday.
 Cellular Operators Association of India (COAI) Director General Rajan Mathews told that operators need "oxygen" and urged the government to take a call on debt restructuring of all the dues that telecom operators owe to the government.
 Mathews said most 4G licences have 11-year validity left, and that the government could pack in another 10 years, thus allowing operators to pay back all the outstanding dues spread over the entire licence period.
 "It is also time to redefine AGR (adjusted gross revenue) prospectively," Mathews said.
 The telecom industry has been haemorrhaging, with combined losses of listed mobile network firms surpassing Rs 1 lakh crore in the September-ended quarter.
 Last week, India's two leading telecom operators Vodafone Idea and Bharti Airtel reported a combined loss of Rs 74,000 crore for the second quarter ended September 2019, mainly on account of statutory dues arising from the recent Supreme Court order on AGR.
 The apex court upheld the government's position of including revenue from non-telecommunication businesses in calculating the annual AGR of telecom companies, a share of which has to be paid as licence and spectrum fee to the exchequer. The ruling over statutory liabilities has triggered a rush for provisioning by telecom companies.
 While Vodafone Idea posted a loss of Rs 50,921 crore, the highest-ever quarterly loss by any company in India, Airtel reported a loss of Rs 23,045 crore.
 On Friday, Reliance Communication posted a consolidated loss of Rs 30,142 crore for the July-September 2019 period due to provisioning for liabilities after the Supreme Court ruling on statutory dues -- marking second-highest loss posted by any Indian company till date.
 Airtel, Vodafone Idea and other telecom operators have to pay the government a whopping Rs 1.4 lakh crore following the Supreme Court order that has sent shock waves through an industry already grappling with past losses and billions of dollars in debt.
 According to latest estimates by the telecom department, Bharti Airtel faces a liability of around Rs 62,187 crore (including share of Tata Group of companies and Telenor India), while Vodafone Idea may have to pay about Rs 54,184 crore. The remaining liability is with state-owned BSNL and MTNL and some of the shut or bankrupt telecom companies.
 Stung by colossal losses, Vodafone Idea has said its ability to continue as a going concern is dependent on obtaining relief from the government and positive outcome of the proposed legal remedy. The company is also in the process of filing a review petition against the Supreme Court order.
 The Department of Telecommunications (DoT) had shot off notices to telecom operators to pay their revenue share dues within three months as directed by the Supreme Court. The DoT has given option to telecom operators to clear all the dues on self-assessment basis.
 Last month, the government also constituted a committee of secretaries to explore a financial bailout package for the telecom sector. MBI HRS

Grant 3-year moratorium, extended timelines for payment of all dues: COAI to govt

New Delhi, Nov 17 () The Indian mobile industry will consolidate further if the government does not offer a material relief on AGR liabilities, regulatory levies and potentially a floor on pricing, according to Kotak Institutional Equities.
 A 'no material relief' scenario would be an industry-structure-altering one, it added.
 "We believe that the Indian wireless industry would consolidate further in case the government does not offer a material relief on...the AGR (adjusted gross revenue) case liabilities...other aspects like recurring regulatory levies, deferred spectrum payments and ...potentially a floor on pricing," Kotak said in a recent report.
 Even as the massive AGR-case-related payout is a meaty gross negative for Bharti Airtel, the potential gross positive from industry consolidation will likely result in a net positive outcome, it said adding that Bharti could be a net beneficiary.
 Credit Suisse noted that Vodafone Idea faced "another operationally weak quarter" and that the government relief measures are "key to sustain".
 The telecom industry has been hemorrhaging, with combined losses of listed mobile firms surpassing Rs 1 lakh crore in the just-ended quarter.
 Last week, India's two leading telecom operators Vodafone Idea and Bharti Airtel reported a combined loss of Rs 74,000 crore for the second quarter ended September 2019, mainly on account of statutory dues arising from the recent Supreme Court order on AGR.
 The apex court has upheld the government's position on including revenue from non-telecommunication businesses in calculating the annual AGR of telecom companies, a share of which has to be paid as licence and spectrum fee to the exchequer. The ruling over statutory liabilities has triggered a rush for provisioning by telecom companies.
 While Vodafone Idea posted a loss of Rs 50,921 crore -- the highest-ever quarterly loss by any corporate in India -- Airtel reported a loss of Rs 23,045 crore.
 On Friday, Reliance Communication posted a consolidated loss of Rs 30,142 crore for July-September 2019 due to provisioning for liabilities after the Supreme Court ruling on statutory dues -- marking the second-highest loss posted by any Indian corporate to date.
 Airtel, Vodafone Idea and other telecom operators have to pay the government a whopping Rs 1.4 lakh crore following the Supreme Court order that has sent shock waves through an industry already grappling with past losses and billions of dollars in debt.
 According to the latest estimates by the telecom department, Bharti Airtel faces a liability of around Rs 62,187 crore (including share of Tata Group of companies and Telenor India), while Vodafone Idea may have to pay about Rs 54,184 crore. The remaining liability is with state-owned BSNL, MTNL and some of the shut/bankrupt telecom companies.
 Stung by colossal losses, Vodafone Idea has said its ability to continue as a going concern is dependent on obtaining relief from the government and positive outcome of the proposed legal remedy.
 The company is also in the process of filing a review petition against the Supreme Court order.
 The Department of Telecommunications had shot off notices to telecom operators to pay their revenue share dues within three months as directed by the Supreme Court. The DoT has given option to telecom operators to clear all the dues on self-assessment basis.
 Last month, the government also constituted a committee of secretaries to explore a financial bailout package for the telecom sector. MBI HRS

You Searched For "74000 crore bailout" and got 4 results

BSNL and MTNL may shed flab and get 4G spectrum as a part of the proposed ₹740 billion bailout plan

BI India Bureau

Over 15,000 BSNL employees rush to opt for VRS package on day one

Prerna Sindwani

Grant 3-year moratorium, extended timelines for payment of all dues: COAI to govt

PTI

Telecom industry to consolidate further in 'no relief' scenario: Kotak Institutional Equities

PTI

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