Cash-strapped Mahanagar Telephone Nigam (MTNL) has submitted a comprehensive revival plan which includes approval for a monetisation scheme, introducing a voluntary retirement scheme (VRS), giving up 3G spectrum, converting its loans into sovereign guarantees and revision of employees’ pay.
In a letter to the Department of Telecommunication, MTNL, which operates in Delhi and Mumbai, said loans to the tune of Rs 20,000 crore was taken to clear statutory dues. “The government must convert these with sovereign guarantee and take responsibility for the principal and interest. This would save the company Rs 2,000 crore per annual interest payment,” it said.
It also hopes to garner around Rs 20,000 crore through monetisation of close to 50 assets and get refunds worth of around Rs 4,100 crore on account of interest cost borne for broadband spectrum in 2010 for 4G services. Department of Telecom (DoT) sources have confirmed that the claims are spread over a decade and that the request is currently under consideration.
The settlement of claims is critical to the ‘Incipient sick’ CPSE which is currently saddled with a debt of more than Rs 19,000 crore. During the current fiscal year (up to September 30, 2018), MTNL’s revenue stood at Rs 1,229 crore, with losses pegged at Rs 1,802 crore.
For the three months ended December 2018, the telecom firm’s loss stood at Rs 832.26 crore while its total income was Rs 692.42 crore, 18.7 per cent lower than Rs 852.64 crore notched up during the corresponding period of the previous year.
Meanwhile, state-run BSNL has also submitted a bail out plan. Both state-run telecom firms have been raising demands for 4G spectrum allocation, especially since competing in the ultra-competitive sector without 4G capabilities is difficult.