BSNL rings in VRS, hoping to wipe out losses in three years

Expects the scheme to lead to Rs 2,400-cr savings annually

Hyderabad, Dec. 16: 

Faced with a severe financial crunch and stuck with losses of Rs 6,000 crore this financial year as well, Bharat Sanchar Nigam Limited (BSNL) is pinning its hopes on a VRS (voluntary retirement scheme) plan to improve its balance-sheet, despite strong protests from employees.

While it will pay out Rs 4,000 crore towards the scheme, BSNL expects the Government to pay Rs 12,000 crore as one-time compensation payments under the VRS. The VRS is expected to result in savings of Rs 2,400 crore annually, ringing in savings of 16 per cent in the wage bill.

This is one of the strategies for BSNL to improve its financial position and wipe out losses in the next three years.

“We are confident that losses will be maintained at Rs 6,000 crore or less this financial year,” said Mr Rakesh K. Upadhyay, Chairman and Managing Director, BSNL. BSNL incurred a loss of Rs 6,000 crore in 2010-11.

Mr Upadhyay ruled out plans of going in for a public issue or a merger with MTNL. He was here on Friday to launch the ‘Choose Your Mobile Number' scheme that allows users to pick a number of choice by using the BSNL Web site, sending an SMS or going to a retailer. It pops up lots of 10 numbers each from a pool of one lakh numbers.

Seeks spectrum fee return

BSNL has asked the Government to return BWA (Broadband Wireless Access) spectrum fee of Rs 6,000 crore and compensation for operating in areas that are not commercially viable. It has also asked the Government to allow it to use its vast land-bank in prime areas (that it acquired from the pre-BSNL days) to start public-private partnerships earn get additional revenues. For now, it plans to start tapping the land it bought in the post-BSNL era.

BSNL's plan to offer VRS to about one-third (or one lakh) of its employees has triggered protests from employees, who allege that it was ITS (Indian Telecom Services) officers who were responsible for the decline in the organisation's fortunes.

Business Line 17/12/2011