BSNL has been in a serious financial crisis for a while. The
state-owned telecom operator is no more in a position to pay salaries or
manage daily operations.
HIGHLIGHTS
- BSNL is in serious financial trouble.
- BSNL has been witnessing rough waters since the last few years.
- With the arrival of Reliance Jio on the scene, the condition has only worsened for BSNL.
There
was a time, when the state-owned Bharat Sanchar Nigam Limited (BSNL),
was among the few telecom operators in India earning profits in excess.
The operator was earning profits in excess of Rs 10,000 crores per year.
Fast forward to 2019 and BSNL is in serious financial trouble - with an
excess debt of Rs 13,000 crore. In fact, it's in such a grave threat
that BSNL may soon shut shop.
The telecom operator has been
witnessing rough waters since the last few years. With the arrival of
Reliance Jio on the scene, the condition has only worsened for BSNL.
Compared to its rivals, BSNL has been lagging way behind in terms of
services and technological advancements. In an era where everyone is
preparing for 5G network, BSNL is testing its 4G network across the
country.
So what has gone wrong with BSNL? What will happen to it? Will it survive this time?
What's wrong with BSNL?
BSNL
is in extreme financial trouble. The company has been in this situation
for a while and the condition has worsened to an extent that it is not
able to pay salaries to its employees. In fact, BSNL has requested the
government's assistance for a financial aid, which in turn has turned to
the banks for help.
How's the government helping BSNL?
The
government has requested a loan of Rs 850 crores just to pay the
salaries of all its employees for the month of June. To keep the company
floating for the next few months, a loan of Rs 2,500 crores has also
been requested.
Will the financial aid help BSNL stay afloat?
The
requested financial aid of Rs 2,500 crore is just enough to keep the
company running for the next 6 months. However, the loan hasn't been
granted yet and the pre-existing debt of Rs 13,000 crores may force
banks to withdraw any form of financial support.
Why is BSNL in this situation?
According
to media reports, BSNL has been in trouble since the last 10 years due
to poor government policies and delays in bringing new infrastructure.
The inferior infrastructure, as well as the company structure, have
further resulted in this situation. Even the Department of
Telecommunications has asked BSNL not to go to banks for getting more
loans.
Will BSNL survive?
This is a the question that
nobody can answer right now. BSNL is in such great debts that lenders
are wondering how the company is going to repay the loans. Even if the
relief of Rs 2,500 crores is granted, it will be a matter of a few
months before BSNL finds itself in trouble once again.
