A government panel currently looking at revival of the loss-making and debt ridden MTNL is veering towards a decision of introducing a voluntary retirement scheme (VRS) in the PSU to trim its 30,000 workforce and rent out its lucrative real estates  in Delhi and Mumbai to fund the VRS and infusing capital to sustain operations as per a plan worked out by a consultant Deloittee.

Although the issues are still being discussed, still the fact that government wants to improve the financial health of MTNL through various means could indicate that it may have kept aside the merger plans for time being, said a source who also added that nothing can be ruled out for future.

As government wants consolidation of PSU banks to make world class and size powerhouses to withstand competition, so in telecom also similar things may work out for bigger play of the PSUs. But for now, the focus is on strengthening MTNL’s operations and financial position, said another source.

The department of telecommunications (DoT) had set up a panel to study Deloitte’s report on restructuring and revival of state-run telecom operator MTNL Considering the rising debt levels of MTNL of around Rs 20,000 crore, the DoT had appointed Deloitte as a consultant to suggest measures for restructuring and revival of MTNL. In its report, Deloitte had suggested various options including financial support for network expansion, partial or full merger between MTNL and Bharat Sanchar Nigam Ltd, sale of MTNL’s wireless business to BSNL, VRS, and monetisation of surplus assets for improving the financial health of the debt-ridden operator.

A senior DoT told Financial Chronicle that the department is not very much in favour of the Deloitte proposal of selling the wireless business of MTNL to BSNL as that would make the former lose the identity which the government does not want and had to consider the objections of BSNL which had termed the huge debt and different salary structure of Mahanagar Nigam Ltd as biggest impediments to the success of the merger between them should it take place.

“We are considering other proposals of the consultants that has a bearing on MTNL making a turnaround on its performances. Our first target is to monetise the huge real estate of MTNL which can be a valued at a whopping Rs 40,000 crore due to their prime locations of Mumbai and Delhi, not by selling them but by leasing them out”, said the official.

The rents from MTNL’e real estates has the potential to fetch Rs 1,600 crore per annum and this could go towards funding the VRS scheme which could be brought out in phases.

anjana.das@mydigitalfc.com