MTNL unions back wage reform plans

18 Sep 2013

Employees of state-backed telco Mahanagar Telephone Nigam Ltd (MTNL) have agreed to government proposals to cut wages in line with the pay scales of sister company Bharat Sanchar Nigam Ltd (BSNL), as part of the state’s bailout plan for the two telcos, the Hindu Business Line reports. Under the agreement, which was accepted by the workers unions of the Mumbai- and Delhi-based operator, wages for MTNL officials will be brought down to the level of those of BSNL at the next wage revision, in 2017. In exchange, the government will foot the bill for the majority of MTNL’s pension burden, making contributions based on BSNL’s current pay scale – MTNL must provide the additional amount. Employee costs have become a major financial burden to both MTNL and BSNL, although MTNL is the worst-affected of the two. In the year to end-March 2013, MTNL booked staffing costs (including pension contributions) of INR43.28 billion (USD684.0 million), equivalent to 127% of revenues for that year, which totalled INR34.19 billion.