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‘Nearly Impossible to Continue Operations:’ BSNL Seeks Govt’s Help

The telecom company has sought the government’s advice on the next “course of action.”

Published
Business
2 min read
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State-owned telecom firm BSNL has sought an immediate cash infusion from the government, saying it is finding it “nearly impossible” to continue its operations, according to The Times of India.

BSNL said, it has become difficult to manage Rs 850 crore salary liability for June as outstanding liabilities of nearly Rs 13,000 crore have made its business “unsustainable”.

Senior General Manager at BSNL's corporate budget and banking division Puran Chandra in a letter to the joint secretary in the telecom ministry said, “The gap between monthly revenues and bare expenses to continue operations as a going concern has reached to a level where continuing with the BSNL operations would be nearly impossible without immediate infusion of adequate equity."

The telecom company has sought the government's advice on the next “course of action,” to revive the ailing corporation, reported The Times of India.

India’s Top Loss-Making PSU

According to a report by Kotak Institutional Equities, BSNL is India's top loss-making PSU. BSNL's accumulated operating loss crossed Rs 90,000 crore at the end of December 2018, reported The Times of India.

Meanwhile, the government has not only failed to ensure any revival road map for the company, but also rejected any suggestions of closing down the company citing BSNL's “strategic” importance, according to the report.

BSNL’s mobile subscriber market has nearly halved since 2004-05 and is currently at around 10 percent as they have moved to private operators such as Reliance Jio, Bharti Airtel and Vodafone-Idea.

Employee expenses, including retirement benefit accruals, were estimated at 66 percent of BSNL’s operating revenues in FY18 as against 21 percent in FY2006.

BSNL had failed to pay the February salaries to around 1.76 lakh employees due to its monetary crisis. This was the first time it had defaulted in payment of its monthly salaries, reported Business Today.

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‘Govt Should Bail Them out’

A Congress Rajya Sabha member on Monday, 24 June, sought immediate steps to revive state-owned telecom firms MTNL and BSNL, saying employees were not being paid salaries on time, reported PTI.

Raising the issue during Zero Hour, Ripun Bora said, while private sector companies have been allotted 4G and 5G spectrum, the two public sector enterprises were being forced to operate services through the 3G spectrum.

According to Bora, about 45,000 employees of MTNL and 1.74 lakh of BSNL were not being paid salaries on time for several months now.

"The government should bail them out," Bora said and made a case for recapitalisation of the two PSUs.

The Congress MP asked the government to take “immediate steps” to reduce losses of the two public sector telecom companies and revive them.

(With inputs from Times of India, PTI and Business Today.)

(At The Quint, we are answerable only to our audience. Play an active role in shaping our journalism by becoming a member. Because the truth is worth it.)

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