VRS for MTNL employees on cards -Governance Now

VRS for MTNL employees on cards

The public sector telecom firm has been posting losses since 2009

GN Bureau | November 7, 2016

#communication ministry #cabinet #PK Purwar #DoT #VRS #MTNL

The ministry of communication may soon seek cabinet approval to offer a voluntary retirement scheme (VRS) to state-run telecom operator Mahanagar Telephone Nigam Ltd (MTNL).

The VRS amounting to Rs 1,000 crore will help the company to cut down high staff cost. About 5,000 employees of MTNL will take VRS, which is about 18% of total employee base. The proposal has already been approved by the telecom commission, the highest policymaking body of the department of telecommunications (DoT).

MTNL, which offers telecom services only in Delhi and Mumbai, has been struggling to survive in a highly competitive market. It plans to invest Rs 2,500 crore over next two-three years to expand and upgrade its network.

The development comes days after P.K. Purwar was appointed as the chairman and managing director (CMD) of MTNL for five years. He was earlier holding the additional charge. Once VRS is implemented, it could save Rs 400-500 crore every year for MTNL and free up certain resources for making more investments in the network, according to the news report published in VCCircle.com.

In July, after a gap of more than two years, the government had started the process to select CMD for MTNL. The company had been without a full-time CMD since May 30, 2014, when A.K. Garg retired from the post.

The public sector telecom firm has been posting losses since 2009-10. For the June quarter this year, it posted a loss of Rs 718.02 crore compared with Rs 734.24 crore in the same period last year. The total income declined by 4.5% to Rs 744.72 crore this June quarter from Rs 780.12 crore in the same quarter a year ago.

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