29 Oct Telecom Employees Receive Relief
Indian telecom employees at a large company facing bankruptcy are finally receiving good news.
Bharat Sanchar Nigam Limited (BSNL) was one of the highest profiting public sector undertakings or PSUs in India. The company has been incurring losses since it was incorporated as a public sector company in 2010. These losses were unknown to most of the telecom employees, until this past June when the company announced it could not pay salaries for the month of August. The unfortunate wage shortage repeated for the month of September, but it’s not all over for the company yet…
Holiday Relief for Telecom Employees
Good news finally strikes for the 1.6 lakhs or 160,000 BSNL workers as the company announced it would be paying the missed September wages. BSNL looks at a total monthly cost of wages of more than RS 850 crore or over $119,000,000. In addition to that, the company is not only responsible for employee salaries but also for loan interest, office spaces, vehicle costs, vendor payments, and utilities. One of the things that make these telecom employees so relieved to be paid is that now their families can celebrate Diwali.
Revival Plan for BSNL
The good news does not stop at paid wages, but the government has also announced approval for a revival plan. The plan consists of some capital funding, voluntary retirement plan (VRP) for senior employees, and a merger with Mahanager Telephone Nigam Limited (MTNL). The revival plan will also provide a portion of the 4G spectrum at 2016 prices for the merger.
According to Business Line, the entire revival plan will cost 70,000 crores (lakhs) or $700 billion. The package is broken down to $2,113,705,500 in sovereign bonds for both companies, $2.8 million to acquire the 4G spectrum, $4.2 million for VRP, and $518,894 for taxes on goods and services.
The Indian Minister of Telecommunications and Information Technology, Ravi Shankar Prasad, explained to the press that “BSNL and MTNL are strategic assets of India.” He went on to explain that he wants the companies to be professional and competitive. Judging by the hefty payout, these two companies will be very important for bringing India into the next generation of mobile connectivity.
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Author: Valerie Stephen