Nokia warns of pulling out of BSNL network if dues worth Rs 910 crore not cleared

By: |
August 5, 2020 7:00 AM

Nokia said BSNL has huge outstanding payments due to it and this keeps on augmenting with expiry of each payment milestone month-on-month.

Currently, BSNL has an outstanding of Rs 910 crore out of which Rs 600 crore is pending for allocation since January 2020.Currently, BSNL has an outstanding of Rs 910 crore out of which Rs 600 crore is pending for allocation since January 2020.

Finnish telecom giant Nokia has threatened to pull out support for maintaining BSNL’s network if its dues worth Rs 910 crore are not cleared immediately. The company, which controls nearly 40% of BSNL’s network, has also warned about job losses as it will be forced to terminate employees, who are dedicated to the state-run firm.

BSNL has not made payments to Nokia since March, despite its commitment to clear the dues in monthly installments by September 2020.

“Given the COVID situation we are now under tremendous financial crunch and it would not be possible for Nokia to infuse any further capital in maintaining the installed equipment and hence continue any further support including AMC (annual maintenance contract) services,” Nokia said in a letter to BSNL Chairman and Managing Director PK Purwar, a copy of which was also marked to Telecom Secretary Anshu Prakash.

Nokia said BSNL has huge outstanding payments due to it and this keeps on augmenting with expiry of each payment milestone month-on-month. Currently, BSNL has an outstanding of Rs 910 crore out of which Rs 600 crore is pending for allocation since January 2020.

“The non-payment by BSNL has adversely affected our cash flow which will now force us to take some major cost cutting measures to sustain ourselves in these difficult times, including terminating our employees dedicated to BSNL account,” Nokia said in the letter, a copy of which has been seen by Financial Express.

It further said Nokia has large number of employees dedicated to BSNL and for the last four months, the company has been retaining them in an attempt to support Prime Minister Narendra Modi’s direction to support staff in COVID crisis. “However, given the continued default from BSNL, we are now being forced to explore such options,” Nokia added.

The gearmaker highlighted that long-standing payments are resulting in significant financial losses to it which has been overdue starting July 2019 translating to additional Rs 75 crore as interest on the delayed payment at the prevailing lending rates.

“…BSNL has continued to default on their obligations to pay including written commitment dated January 21, 2020 and January 31, 2020, resulting in loss of faith which makes it further difficult for us to seek approval from our management to continue to render any further services,” Nokia said.

The firm has sought immediate payment of Rs 910 crore along with accrued interest.

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