BSNL, MTNL On Verge Of Closure Following Huge Loss: Report


BSNL and MTNL might soon be things of the past. Bharat Sanchar Nigam Limited, India's largest public-sector telecom provider, is losing a hard-fought battle against private vendors. BSNL is now on the verge of a sell-off or a complete closure as its loss keeps accumulating. The telecom giant has pegged a loss of Rs. 14,000 crores during the financial year of 2018-2019.

BSNL, MTNL On Verge Of Closure


BSNL To Shut Down

BSNL has incurred a loss of Rs. 17,645 crores between 2015-16. This puts the total loss close to Rs. 32,000 crores. Considering the heavy financial losses, it is running on, the Union Finance Ministry is considering a complete shutdown of both BSNL and MTNL. BSNL had asked for Rs. 74,000 crores for its revival, but it looks like the central government will be overruling the request.

There could be many reasons for the poor performance of the network provider. BSNL employees blame the snail-pace of decision making and red tape issues within the organization. But, there was one point in time where BSNL was at its peak, where it earned high profits, even more than Indian Oil.

BSNL was established in 2000 and within eight years, the organization had paid back more than its investments, says SD Saxena, former director of finance of BSNL in a statement to the Finacial Express. "It is very easy for the government to say that it will close the company. The company has given huge returns to the government. The kind of investments that were made in the company, it has paid many times over," he said.

BSNL Employees Face Uncertain Future

Speaking of the employees, BSNL and MTNL staff come under three categories, namely, Indian Telecommunication Services staff; staff under other PSUs; and lastly employees directly recruited by PSUs. A Financial Express report states that BSNL required Rs. 95,000 crores to provide a voluntary retirement scheme (VRS) to its 1.65 lakh employees and for its debt repayment.


The future of the employees is uncertain now. The central government is still in talks and no final decision has been taken about BSNL and MTNL. But it's been confirmed that the government has declined the proposal for Rs. 70,000 crores for BSNL's revival. In other words, this could either mean a complete shutdown or a sell-off. The central trade unions and employee unions are blaming the government for not supporting the company during the crisis and leaving its employees hanging in balance.

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