Ailing public sector telecom firm BSNL might have managed to pay off its employee salaries for July on Monday this week, but it still struggles with a Rs 800-odd crore gap between its monthly revenues and expenses, a large portion of which goes into meeting its wage bill. Unless the company manages to bridge this gap, it will continue to struggle to meet its operational expenses, officials said.
While a revival plan for BSNL and MTNL formulated by the telecom ministry is likely to be taken up for examination by the Union Cabinet soon, the company is also emabarking on several other ways to reduce its expenses. According to reports the company’s chairman and managing director PK Purwar said this week that the firm is “reviewing the functions that are currently outsourced to see if they can be streamlined or if some of that work can be done in-house”.
“There might be an eventual expenses reduction by as much as Rs 200 crore annually,” said a senior executive to this publication. According to the executive, BSNL currently outsources several functions, especially in maintenance and repair, while there are other areas where savings can be made too. “The company believes it can save a lot by reducing power costs too. The CMD has said recently that we should aim to cut power costs by 15 per cent,” the source said.
Meanwhile, on Wednesday, Purwar allayed fears of service disruptions arising from the firm’s ongoing financial crisis, noting that it earns revenues of Rs 1,400-1,500 crore a month indicating “inner strength”. The company’s employees’ unions have also been seeking a grant or a soft loan from the government to help the company effect a turn around. Earlier this month, the Sanchar Nigam Executives' Association (SNEA) had written to the Prime Minister’s Office seeking around Rs 6,000 crore of funds and approval for land monetisation proposals.
However, land monetisation is likely to be one of the several measures in the government’s long-awaited revival plan for BSNL and smaller state-run peer MTNL. According to sources, the plan formulated by the telecom ministry also involves a merger of the two ailing companies, a VRS package, allocation of 4G spectrum and asset monetisation.
(With agency inputs)