Nokia has reached out to India’s Prime Minister Narendra Modi to seek his intervention in recovering network-related dues from state-run Bharat Sanchar Nigam Limited (BSNL).
The Finnish telecom equipment maker, in its letter to Modi, said that such payment delays would negatively affect global industry sentiment to invest further in India.
Nokia, which received Rs 150 crore ($19.5 million) in late December last year, said that BSNL still owes around Rs 970 crore ($128.34 million) towards network-related dues.
Nokia provides network technology to BSNL in South and Western zones, while China’s ZTE is the network vendor for East and North zones. Both vendors bagged contracts from BSNL to deploy 40,000 broadband sites in 2017.
As of mid-December, BSNL owed Rs 1,300 crore ($172 million) to ZTE in CAPEX and OPEX dues.
ZTE and UTStarcom have also been seeking the government’s intervention to get their dues cleared from the telecom operator. Nokia, ZTE, and UTStarcom had previously threatened to withdraw network support for over non-payment of dues.
The Indian government had announced an almost $8 billion plan in October last year to help loss-making state-run telcos BSNL and Mahanagar Telephone Nigam Ltd (MTNL).
“…we are unable to see any significant improvement at BSNL for release of long pending payments even after 6-7 months of the package the announcement,” Sanjay Malik, Senior Vice President and Head of India Market at Nokia said in his letter to Modi.
The Finnish telecom gear vendor provides network technology to BSNL in the South and Western zones of the country. Malik said that even without payments, Nokia has been supporting BSNL’s network in India.
The executive said that the non-payment has resulted in significant financial losses to Nokia, and directly impacts its ability to service over 300 million subscribers in India that are served by the company.
Malik said that the company had written around 22 letters to the telecom department (DoT), Niti Aayog, Prime Minister’s Office and BSNL in the last 18-20 months.
In an April letter to the DoT, India’s telco representative body COAI had also raised the issue and said that BSNL owes over Rs 20,000 crore ($2646.2 million) to telecom gear makers, infrastructure providers, and other vendors related to telecom services.
“…this huge scale of delays and breach of contract commitments by Public Sector Units is highly detrimental to global business sentiment towards India…such issues give a negative signal to global investors on the risks of investing in India and to enter into contracts with government entities,” COAI’s director general Rajan Mathews had said in his letter to DoT.
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