CMD of the two companies told TOI that the reduction in manpower will help them move towards profitability over the next three years as they save the much-required cash, while launching services such as 4G to lure new high-paying subscribers.
“The VRS scheme has met our expectations and for BSNL, the annual savings post the reduction in employees will be Rs 7,000 crore,” CMD Pravin Kumar Purwar told TOI. BSNL is estimated to have losses of around Rs 14,000 crore in 2018-19. It had nearly 1.5 lakh employees before VRS offer. Purwar hopes that a leaner company will be more productive, while sufficient cash at the hands of the management can be put to work out a revival. “We expect to complete the VRS process by the end of January next year. This will be a major relief to shore up our finances,” he said.
For MTNL, the VRS has been even more successful as the company will be reducing its manpower from the existing 18,400 to just 4,300. “We are highly satisfied with the response, and a lot of this has been made possible by the government’s generous exit scheme,” Sunil Kumar, MTNL CMD, said.
The reduction in manpower will have a major impact on the company’s salary bill that goes down from Rs 2,272 crore now to Rs 500 crore after the completion of the exercise. “We will be at optimum manpower level, and if there is shortage in certain functions, we are open to outsourcing,” Kumar said. MTNL had a loss of Rs 3,398 crore in 2018-19 and is estimated to be the third-biggest loss-making PSU in the country.
Now, telcos seek floor price for data
After raising tariffs by up to 45%, telecom companies have now approached regulator Trai for fixing a floor price for data charges, a move which if approved will result in internet costs going up for the consumers.
COAI said there is concurrence of its members on the demand. “All the current private telecom service providers — Bharti Airtel, Reliance Jio and Vodafone Idea — are in complete agreement… to regulate tariffs by setting floor price for data services. This should be done as soon as possible,” COAI DG Rajan Mathews said in a letter sent to the regulator.