Logo of Bharat Sanchar Nigam Ltd (BSNL) painted on a wall outside its office in Kolkata
A woman speaks on her mobile phone in front of the logo of Bharat Sanchar Nigam Ltd (BSNL) painted on a wall outside its office in Kolkata, India. The public sector telecom provider has failed to pay the February salaries to its staff amid stagnating revenues.REUTERS/Rupak De Chowdhuri

The salary woes of the staff of public sector telecom provider Bharat Sanchar Nigam Ltd (BSNL) after failing to get their pay for February is likely to continue into next month with March salary also likely to be delayed, media reports say.

The BSNL has been struggling to meet the salary expenses of its 1.76 lakh employees with the state-governed company sinking more and more into the red over the past five years. However, this has been the first time when the company has failed to meet its salary obligations. According to BSNL sources, the cash flow pattern indicates that the company may have trouble meeting the March salary obligations on time, according to a media report.

BSNL employees in some states have staged demonstrations demanding the early release of the salary. A three-day strike by the Odisha unit of the BSNL Employees Union concluded on Wednesday. The employees' union has also written to Minister of Telecommunications Manoj Sinha demanding that the government release sufficient funds to the company to pay the salaries. The employees' leaders have also demanded that the government takes steps to revive the company which at one time was the only telecom provider across the whole nation.

The staff unions allege that the current crisis is because of Department of Telecommunications (DoT) has been delaying a management proposal to raise a bank loan that has got the nod from the board of directors of the BSNL, according to a Financial Express report.

Airtel vs Reliance Jio
Airtel vs Reliance Jio: Intense price wars in the telecom sector has hit revenues and the BSNL is struggling to keep up with the aggressive marketing tactics of the private players.IBTimes India

BSNL's losses have been steadily rising over the past few years. The company reported a loss of Rs 8,000 crore in FY18, compared to Rs 4,786 crore in the previous financial year. The company's losses are showing no signs of tapering off and the FY19 losses could top Rs 8,000 crore, a report says. DoT sources say the BSNL, which has a total debt burden of Rs 13,900 crore, can take a loan only to meet capital expenditure and not for meeting operational costs. Comparatively, Airtel's debt burden is Rs 1.13 lakh crore, market leader Vodafone's Rs 1.2 lakh crore and Reliance Jio's Rs 2 lakh crore.

According to sources, a DoT panel has found about 35,000 employees of the BSNL as excess. It says the about 55 per cent of the BSNL revenues go for meeting the wage bill which keeps rising annually. However, the company's revenues have remained stagnant for many years now as it is the facing tough competition from private players. One of the major factors that have put pressure on the BSNL's revenues has been the brutal price wars ignited by the entry of billionaire industrialist Mukesh Ambani-led Reliance Jio.

The BSNL has started paying the February salaries to staff at its corporate office, Kerala, Jammu and Kashmir and Odisha, the FE said in its report citing unidentified official sources. "As and when the income is generated, salaries will be paid to the staff. As the government has not given any financial support, the salaries are being delayed," the official told FE.

The BSNL unions allege that the company's current state is because of Prime Minister Narendra Modi government's policies that favour private players against the public sector. The government denies any special favours to the private sector and vows to continue providing a level playing field.