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BSNL cuts employee benefits, considers VRS for 35,000 employees to cut down expenditure

Bharat Sanchar Nigam Limited has taken several steps to cut down its expenditure drastically. A DNA Money report says that the state-run telecom has frozen employee benefits and has undertaken measures to cut down expenditure drastically in a bid to sustain itself in the current market scenario. Last year, BSNL had managed to save Rs 2500 crore through several cost-cutting exercises. It hopes to save a similar amount this financial year. According to the report, the public sector company has saved Rs 625 crore in employee benefits. BSNL has around 1.8 lakh employees, taking the company’s annual expenses to Rs 15,000 crore.

A preliminary report by IIM Ahmedabad for the revival of the company suggests a voluntary retirement scheme to about 35,000 employees at the cost of Rs 13,000 crore. The preliminary report has been submitted. DNA Money reports that the final report may be submitted soon.

Shrivastava said BSNL is working on various models on how to meet the costs for VRS package. This may either come from the government support or through a soft loan. The last two-year churn in the telecom sector, especially after the entry of Reliance Jio, has affected the financials of a number of telecoms, including BSNL.

As per TRAI data, BSNL’s revenue market share was at Rs 1,284.12 crore in the July-September quarter this fiscal. Jio led the pack with in terms of the adjusted gross revenue (AGR) earnings from mobile phone service by making Rs 8271 crore in the July-September quarter.  Newly merged Vodafone-Idea stood second with AGR market share of Rs 7528 crore, while Bharti Airtel was at the third position with Rs 6720 crore for the same quarter.

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