Pension benefits will also be brought at par

The Government has decided to bring parity between the pay scales of employees at Mahanagar Telephone Nigam Ltd with their counterparts in Bharat Sanchar Nigam Ltd. This will be done at the time of next wage revision in 2017.

At present, MTNL workers get higher pay compared to BSNL employees.

Rehab plan

The move to bring parity is part of Government’s overall plan to revive the two public sector telecom companies. This will also mean that pension benefits of the two companies will be brought at par.

“The liability of the Government towards pension of absorbed employees of MTNL may be restricted to the equivalent scales of similarly placed employees in BSNL. In case MTNL decides to pay pension on the basis of existing pay scales, the liability arising from the same shall be borne by MTNL,” a top Government official said, adding that this was decided at the last meeting of the Empowered Group of Ministers.

MTNL has been told to get a written agreement with the employees to this effect. However, MTNL employees said the Government proposal may not be accepted by the workers’ union. High wage costs have been a concern for MTNL. Salary and pension expenses of MTNL employees are more than its revenues.

In addition to the pay scale, the Department of Telecom has presented to the EGoM a multi-pronged strategy to revive the two PSUs. For example, the DoT has offered to take over the debt of MTNL and BSNL in return for their surrendering broadband spectrum.

While MTNL has a debt of around Rs 8,400 crore, BSNL has taken loans of Rs 2,500 crore.

Broadband spectrum

The DoT has proposed this to the Empowered Group of Ministers so as to save the Government from paying cash immediately to the two public sector undertaking.

BSNL and MTNL had taken broadband spectrum in 2009 without participating in the auction. The two PSUs were told to pay the final bid price quoted by the private players. As a result, BSNL ended up paying Rs 8,300 crore, and MTNL Rs 4,500 crore.

But after two years, the PSUs could not find a suitable business model to make money from wireless broadband services using this spectrum.

(This article was published on August 26, 2013)
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