Once powerful BSNL is in red and does not have money to pay the salaries to its employees. The BSNL is now with a begging bowl is in front of Government seeking Rs 850 crores for giving salaries of June.
The BSNL has nearly Rs 13,000 crore as outstanding liabilities that have made running the business difficult.
“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,” Puran Chandra, senior general manager at BSNL’s corporate budget and banking division, stated in a letter to the joint secretary in the telecom ministry (who also sits on the board of BSNL).
With Jio, Airtel, Vodafone steam rolling over the customer base, the mighty BSNL is gasping for survival as the Reliance Giga is being unrolled to tale away from the broadband fixed line customers too from the BSNL.
The state-owned telecom firm had failed to pay the February salaries to around 1.76 lakh employees due to its financial crisis. This was the first time the company had defaulted in payment of its monthly salaries.
The fully government-owned corporation is undergoing a major cash crunch due to the price war with private companies. According to a report by Kotak Institutional Equities, the accumulated operating losses of BSNL were more than Rs 90,000 crore at the end of December 2018.
Meanwhile, the government has not only failed to ensure any revival road map for the company, it rather rejected any suggestions of closing down the company citing BSNL’s “strategic” importance, the report said.
BSNL’s chairman had also given a presentation to Prime Minister Narendra Modi a few months back but no final decision was taken on how the company would survive.
This is noteworthy that the telecom sector has been battered by falling tariffs, eroding profitability, and towering debt, in the face of stiff competition triggered by disruptive offerings of Reliance Jio, owned by richest Indian Mukesh Ambani.