BSNL, MTNL nonpayment may force domestic companies to cut workforce

The survival of homegrown telecom gear makers and suppliers has once again come under the cloud with a few firms mulling layoffs following the nonpayment of outstanding by the Centre’s public-sector companies such as Bharat Sanchar Nigam Limited (BSNL) and Mahanagar Telephone Nigam Limited (MTNL) in the wake of national shutdown due to Coronavirus outbreak.“The continued delay in clearing our dues by government-owned companies has led us to a critical situation that too at a time when there is a complete lockdown, forcing us to look at ways to cut costs including headcount reduction,” a senior executive of a Delhi-based company on anonymity said.

The Indian-origin companies that predominantly operate in the telecom sector employ nearly 2 lakh individuals.

Led by the Telecom Exports Promotion Council (Tepc)-headed by former telecom secretary Shyamal Ghosh, the network solutions and optic fibre vendors and makers have already sought intervention from the Department of Telecommunications (DoT) but, according to companies, things remain standstill.

The group claimed that the Central Public Sector Undertaking (CPSU) companies owe as much as Rs 2,300 crore to companies that purely adhere to Prime Minister Narendra Modi‘s prestigious Make in India program, and allege that the actions of two state-owned telcos were contradictory to the Centre’s policy initiatives.

On March 3, the Department for Promotion of Industry and Internal Trade (DPIIT) in a communique asked the state-led companies to make full payments to micro, small and medium enterprises (MSME) or otherwise the Ministry of Finance be informed.

In a letter to telecom, law & justice minister Ravi Shankar Prasad, dated April 8, Telecom Committee Chairman of the PHD Chamber of Commerce and Industry Sandeep Aggarwal said that the government should immediately intervene to clear dues from the Universal Service Obligation Fund (USOF) as well as the state-run BSNL, MTNL and Telecom Consultants of India Limited (TCIL).

The telecom committee has also sought a comprehensive stimulus package from the Modi government, for survival amid lockdown and intense competition from multinational players.

Aggarwal said that the Ministry of Finance should take appropriate action to save domestic companies that are on the verge of collapse due to the double whammy of shutdown and non-clearance of outstanding by state-led firms.

“In view of telecom being a critical service during the time of Covid-19 pandemic, the companies should be allowed 50% operations after providing safe conditions, and social distancing between workers,” he added.

The Ministry of Home Affairs (MHA) is likely to allow some relaxation in coordination with the Ministry of Health & Family Welfare (MoHFW) from April 20 that may include selective and conditional nod to restart manufacturing facilities. The national lockdown has though now extended to May 3.

Represented by Delhi-based telecom group, the homegrown companies that have been demanding their dues to be cleared from the two state-controlled telecom companies include Vindhya Telelink Limited, Paramount Wires & Cables Limited (PWCL), Tejas Networks, Polycab India, Vihaan Networks Limited (VNL), Finolex Cables and Transline Technologies.

In October last, the Cabinet had approved a revival package worth Rs 70,000 crore for BSNL and MTNL that include Voluntary Retirement Scheme (VRS), asset monetisation and allocation of fourth-generation or 4G airwaves. However, the mega scheme is yet to be fully implemented.

Early this week, BSNL chairman-cum-managing director Pravin Kumar Purwar has been additionally appointed to the MTNL’s top post that would further create a synergy between the two service providers that may lead to their full-fledged merger as envisaged in the revival plan.

―Gadgets Now