The Hindu Business Line : MTNL again puts off VRS; cold response to VSNL offer

MAHANAGAR Telephone Nigam Ltd (MTNL) on Monday postponed its voluntary retirement scheme (VRS) for the second time in 12 months, even as Videsh Sanchar Nigam's recent VRS, the second after the Tatas assumed ownership, has failed to fetch even one-tenth of the anticipated response.

MTNL, whose VRS of mid-2003 did not work out, had planned another one after its board of directors recommended it last month. But on Monday, the company announced that it was putting it in abeyance, citing "administrative reasons."

VSNL's latest VRS closed on February 29, with only 69 of the targeted 800 staff opting for it, said an official. This was in contrast to its first VRS (post-takeover by the Tatas) when 950 employees, representing 34.75 per cent of the company's employee strength,, opted for it. The number of executive staff who opted for retirement was 245 and non-executive 705.

Overseers now feel that a Government lineage, as far as employees go, does put a spoke in the wheel for any management, public or private. VSNL, with operations in international and national long distance telephony, and Internet and networking services, now has close to 2,000 employees. MTNL has a staff of almost 60,000, though it is present only in the two circles of Delhi and Mumbai. In the private sector, Bharti Tele-Ventures, with pan-India presence in several kinds of services, including extensive retail, has only 5,500 employees.

Company officials at MTNL said its staff size would have to be cut down not merely for the company's own benefit but also to make it look less intimidating to future private buyers, "should" the Government decide to disinvest. "No private enterprise would take on the liability of 60,000 staff for two circles," they said.

But both its VRS plans were derailed by opposition from its employees' union, whose central demand was for pension akin to what Bharat Sanchar Nigam Ltd's staff are entitled to; their argument being that the Department of Telecommunications had been responsible for posting selected staff either to MTNL or BSNL.

In the case of VSNL, several employees said they were collectively determined not to take the VRS "whatever the consequences."

During the first VRS, there was some kind of fear of private ownership," said an official with VSNL. "People did not know what was in store, whether they would be transferred out and the like, and 950 took it." This time, said the employees, they had got used to the new management and would prefer to remain.

In fact, the second VRS had expanded its scope to make more staff eligible. Whereas the earlier one had specified 40 years of age as well as 10 years in the company, the second required only one of the two conditions for non-executive staff. Also, said an employee, interest rates were now so low that a lumpsum from VRS was unattractive unless there was a subsequent job ensured.

VSNL appears resigned to the situation. The Chairman, Mr Ratan Tata, referring to the VRS at the recent EGM of the company, said it "was attractive but unfortunately the employees did not respond." VSNL would now concentrate on retraining and deploying its staff, he said.

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