40% Of BSNL’s Network Can Go Down As Nokia Threatens To Stop Services: But Why?

40% Of BSNL's Network Can Go Down As Nokia Threatens To Stop Services: But Why?

40% Of BSNL’s Network Can Go Down As Nokia Threatens To Stop Services: But Why?

Nokia has threatened BSNL to pay its dues worth Rs 910 crore immediately to avoid the consequences like pulling out support equipment, job losses in the state run telecom firm. 

Read on to find out more…

Nokia In A Letter To BSNL Threatens The Telecom Firm!

Nokia in a letter to BSNL Chairman and Managing Director PK Purwar, a copy of which was also marked to Telecom Secretary Anshu Prakash, said, “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 further stated in the letter, “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.”

The Finnish company controls nearly 40% of BSNL’s network.

Nokia said it will be forced to terminate employees, who are dedicated to BSNL.

The company also noted that it has a large number of employees dedicated to BSNL and that they are not terminating any workforce  in an attempt to support Prime Minister Narendra Modi’s direction to support staff in COVID-19 crisis.

Nokia added, “However, given the continued default from BSNL, we are now being forced to explore such options.”

BSNL Avoiding The Monthly Payment Milestones!

BSNL had committed to pay its dues to Nokia in monthly installments by September 2020, but has failed to do so since March. 

Nokia said BSNL has huge outstanding payments due and this amount keeps on increasing with the deferring of monthly payment.

Out of the Rs 910 crore outstanding amount, Rs 600 crore remaining unpaid since January 2020.

Nokia has also pointed out that these overdue payments are leading to significant financial losses which have been long-standing starting July 2019. As a result, additional Rs 75 crore as an interest on the delayed payment at the prevailing lending rates has also been added to the amount.

Furthermore, the company said, “…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.”

In other words, Nokia has demanded an immediate payment of Rs 910 crore along with accrued interest from BSNL otherwise the Indian telecom firm will have to face consequences.

BSNL has already been in conflict with the government, its own employees. And now this.

We will keep you updated as more drama unfolds…

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