The board of state-run telecom operator Bharat Sanchar Nigam (BSNL) Limited has reportedly approved the proposal to lay off over 54,451 employees. This constitutes around 31 per cent of the 1.74 lakh-strong workforce of BSNL.
The final call on the matter is expected to be taken after the 2019 Lok Sabha elections are over to avoid any immediate impact on voting.
The BSNL board approved three out of ten suggestions proposed by an expert panel set up by the government in the March meeting. The approved suggestions include :
- Reduction in retirement age from the existing 60 years to 58 years
- Voluntary Retirement Scheme
- Fast-tracking allocation of 4G spectrums to BSNL
The expert panel, which recommended the steps approved by the BSNL board, was formed in the face of mounting losses at the telecom company. The three-member panel consists of professors Rekha Jain, Vishal Gupta and Ajay Pandey from Indian Institute of Ahmedabad (IIM-A).
Department of Telecommunications (DoT) is unlikely to go through with the layoff plan until the elections are over. As per media reports, sources said that announcing the VRS package or job cuts and shutting down businesses of the telecom firm would have huge implications on employees and ongoing elections. Therefore, DoT had decided to wait and watch.
BSNL has been posting losses since the entry of Mukesh Ambani’s Reliance Jio in the Indian telecom market which was followed by the tariff war. Last month, as never seen before, the company even failed to pay its employees. This has happened for the first time since it started operations. However, full salaries were later disbursed after government released pending dues.
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The layoffs move is expected to help the state-run telecom firm save Rs 13,895 crore on the wage bill over the next six years, whereas the VRS might help it save Rs 1,671 crore to Rs 1,921.24 crore every year.
Meanwhile, reports suggested that the DoT may implement the recommendations under the 7th Pay Commission for BSNL sometime in April 2019. The department has already forwarded the demands of salary and pension hike raised by BSNL employee union AUAB to the Ministry of Finance.
In January this year, Sunil Mittal, Chairman Bharti Enterprises (Airtel), had quoted:
“The condition of the telecom industry has been appalling and that is one of the reason why eight companies have gone out of business. $45-50 billion has been written off.
Large corporations such as the Tatas, Telenor, Aircel and Anil Ambani owned Reliance Communications have finally had to pack up and only three companies remain. The second- and third-largest operators, Vodafone India and Idea Cellular too had to merge just to survive.”
In February 2019, British telecom major Vodafone alleged that regulatory outcomes in India over the past two years had been against every telecom operator except Reliance Jio.