Wednesday, January 2, 2013

VRS is not a viable option- Firstpost.com 01 01 13


But will returning spectrum money be enough? The sources pointed out that both PSUs have huge, unsustainable manpower costs which need to be trimmed. “BSNL uses up more than 50 percent of its revenues in paying salaries when the industry average is just 7 percent. The percentage for MTNL is even higher, close to 70. There is an urgent need for these PSUs to shed flab”.


A Voluntary Retirement Scheme (VRS) is not a viable option at present since it will require a large lumpsum – anywhere between Rs 20,000 to Rs 30,000 crore – which the government is unwilling to fund and the PSUs unable to generate. The sources said the linesmen comprise the largest chunk of non-productive workforce at these PSUs since landline services have been declining across the country.

Now BSNL has been asked to first conduct a study on how many employees in which category can be offered VRS by speaking to employee unions. “We have asked them to explore the possibility of taking bank loans to complete a VRS process. Besides, a large chunk of manpower would retire in the next few years,” sources said.
On their own too, both PSUs have lined up several initiatives such as selling surplus land, using existing telecom infrastructure better and providing broadband connectivity to schools, etc, to generate more revenue.


But unless the government, PSUs and their employees all work towards efficiency and increase revenue generation, profitability may remain a distant dream for BSNL and MTNL. In its presentations before DoT recently, BSNL has said it would return to the black in the next five to six years whereas MTNL says profitability may be achieved by March 2013! But official sources quoted earlier said the two companies have made a number of assumptions while making profit projections and need to tread cautiously.



Coming back to the Air India story, the airline has seen a remarkable turnaround in the last six-eight months when government equity infusion and a determined effort to cut off loss-making routes helped the airline become the second largest in India in terms of market share. This, despite fierce competition from private airlines.






http://www.firstpost.com/business/telecom-psus-want-to-sell-rs-11000-cr-spectrum-back-to-govt-

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