PMO intervenes to bail out BSNL, MTNL

New Delhi: The Prime Minister Office is learnt to have agreed in principle to bail out loss-making public sector telecom firms MTNL and BSNL by addressing their three key pain points.

In a meeting held a couple of days back with representatives of telecom and finance ministries and Niti Ayog, the PMO asked the Department of Telecom to send expeditiously a roadmap for allocation of 4G spectrum to both the firms, voluntary retirement scheme and grant of immediate financial aid, according to an official source. The troubled PSUs have been seeking these three measures to stay afloat amid cut throat competition in the telecom sector.

"The government has taken a decision that both MTNL and BSNL have to be revived and sustained in a healthy manner. Senior officer from PMO held a meeting with DoT, finance ministry and Niti Aayog in which it has been decided that DoT will submit a detailed roadmap at the earliest to concerned authorities for the revival of MTNL and BSNL," the source said.

Both the companies have also sought spectrum for 4G services through equity infusion from the government. BSNL, which has the lowest debt of Rs 14,000 crore among all telecom operators, has sought 4G spectrum across India through equity infusion of Rs 7,000 crore.

The total spectrum will cost the firm Rs 14,000 crore. The PSUs have been also ailing because of high revenue-to-debt ratio due to a high number of government employees that were transferred by the Department of Telecom to them at the time of their formation.

BSNL has 1.76 lakh employees across India and MTNL has 22,000 employees. MTNL has sought a refund of interest that it paid for broadband wireless access spectrum which it was given by the government and asked to pay the price that was determined in auctions held in 2010.

Both state-run telecom firms have asked for permissions to monetise their land assets as well as the voluntary retirement scheme for employees on the Gujarat model.