Fixing bloated wage bills is key to making PSUs viable

Posted online: Friday, Jan 10, 2014 at 0000 hrs
While it looks at ways to make PSU telcos BSNL and MTNL viable it did a similar exercise for Air India last year the government would do well not to get distracted by the fancy numbers put out by the PSUs. BSNL, for instance, has projected revenue growth of 47% over the next four years.

Given the competition is unlikely to stay still, the chances of PSUs raising their market shares in a significant manner are low. Meanwhile, as the table shows, their wage bills are killing. How can MTNL compete with a Bharti Airtel if its wage bill is 154% of its revenues versus under 5% for Bharti Airtel? SAIL is in a similar mess.