Can’t Pay June Salaries, Nearly Impossible to Continue Operations: BSNL Sends SOS To Modi Govt
The company reportedly has outstanding debts of nearly Rs 13,000 crore.
The state-owned Bharat Sanchar Nigam Limited (BSNL) continues to ail. As per a report in the Times of India, BSNL has sent an SOS to the government, seeking immediate cash support. The report states that for the telco it is “nearly impossible” to continue operations, or pay the Rs 850 crore salary liability for June as outstanding debts of nearly Rs 13,000 crore have made it “unsustainable” to conduct business.
In a letter to the joint secretary in the telecom ministry, Puran Chandra, a senior general manager at BSNL’s corporate budget and banking division wrote: “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.”
According to a report by Kotak Institutional Equities, the public sector undertaking’s accumulated operating loss crossed Rs 90,000 crore at the end of December 2018. The corporation has been ailing for some time now. Off late, BSNL has continued to be in the news exclusively because of its negative performance, debt and inability to pay salaries on time. The creditors and suppliers to the company are also in trouble. “BSNL just doesn’t pay. It is a task to recover our dues,” one of the suppliers told ToI.
Per the report, the company’s mobile subscriber market share has nearly halved since 2004-05 and is at around ten per cent at present. Of its subscribers, many are low-paying customers against the high ARPU (average revenue per user) subscribers bagged by private operators such as Reliance Jio, Airtel and Vodafone-Idea.
Prime Minister Narendra Modi had reportedly taken stock of the BSNL’s condition a few months back. However, no clear solution has emerged for the PSU that employs nearly 1.7 lakh people.
Even as recently as June 18, the All India Graduate Engineers and Telecom Officers Association (AIGETOA) in a letter to Prime Minister Narendra Modi sought budgetary support to BSNL to help address liquidity crunch that is adversely impacting operation and maintenance of services at the organisation.
“We firmly believe that with minimum basic support from the government to do away with the current liquidity crunch, BSNL can once again enter into the league of profit-making companies,” the letter said.
The government had considered the issue on a priority basis even when the model code of conduct was in force for the recent Lok Sabha elections. According to Minister of State for Telecom Sanjay Shamrao Dhotre, the proposal for revival of both PSUs is likely to be placed before the Cabinet in the next 3-4 months.
(With PTI inputs)