State-owned telecom firm MTNL expect to be operationally profitable within two years, following a revival plan approved by the Cabinet on Wednesday.
MTNL Chairman and MD Sunil Kumar said the voluntary retirement scheme approved by the government is very lucrative for the employees, and he expects all the 15,000 employees eligible for it will take it.
"It is a very path-breaking decision by the government. The VRS is very lucrative for all the eligible employees. This will bring down our employees cost to 25 per cent of revenue from 85 per cent at present by February. We expect to be EBIDTA positive within 2 years due to this step," Kumar told PTI.
The government has approved a Rs 68,751-crore revival package for loss-making BSNL and MTNL, including 4G spectrum allocation and voluntary retirement scheme.
The Cabinet also approved merger of the state-owned telecom firms and till the completion of the process, MTNL will operate as a subsidiary of BSNL, Telecom Minister Ravi Shankar Prasad said here while sharing details of the revival package.
The company had posted loss of Rs 3,388.07 crore and revenue of Rs 2,085.41 crore in 2018-19. The total debt on the company is around Rs 20,000 crore.
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The finance cost of MTNL was around 50 per cent of the revenue.
Out of the total Rs 69,000 crore, MTNL is estimated to get Rs 4,000 crore for VRS and around Rs 7,000 crore from the sovereign guarantee bonds.
The government has set deadline of January 31, 2020 for BSNL and MTNL employees to opt for VRS.
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