BSNL Vendors to Get Paid Finally as Telco Receives Rs 1,500 Crore from Centre

BSNL and BBNL, both have received Rs 750 crore each from the reserve fund to pay off their dues to the vendors and contractors

By December 10th, 2019 AT 5:00 PM
Highlights
  • The funds have been given from the Rs 50,000 crore strong USOF
  • BSNL has massive dues to pay off its fibre vendors
  • The amount has been given on the account of BharatNet - II

Bharat Sanchar Nigam Limited (BSNL), the state-led telecom operator has a lot of outstanding dues on its part, which it needs to pay to the vendors. The dues to these vendors were one of the reasons of financial trouble for the telecom operator. Now, as per a new ET Telecom report, the two state-led entities, BSNL and BBNL, Bharat Broadband Network Limited, have started clearing their outstanding dues to their vendors as the Department of Telecommunications (DoT) has released funds for these two entities. The total funds released from DoT for these two companies are Rs 1,500 crore. Also, as per the available information, the funds have been released for these two companies for the BharatNet – II programme. Not only this, but the funds for BSNL and BBNL have been released from the Universal Service Obligation Fund (USOF) which is a Rs 50,000 crore reserve. Out of this reserve, the government has released Rs 750 crore for each BSNL and BBNL so that they can pay off their vendors and contractors.

bsnl-vendors-dues-rs15000-crore

BSNL and BBNL Receive Rs 1,500 Crore Fund

A senior official also confirmed that government had cleared the Rs 1,500 crore fund to BBNL and BSNL on account of the BharatNet-II project. The official also added that with these funds, BSNL has managed to pay off Rs 300 crore worth of dues to its vendors and contractors. This new development of receiving funds for BSNL comes after the homegrown companies decided to meet Anshu Prakash, the telecom secretary on November 22, 2019. These telecom operators sought immediate “financial relief” to avoid collapse. It is also worth noting that under the BharatNet project, the government aims to connect 250,000-gram panchayats or over 600,000 villages with an optic-fibre network with a special purpose vehicle (SPV) of BBNL.

Telco Starts Paying Off Vendors and Contractors

According to the official quoted above, the companies have already started disbursing the money to its various circles like Uttar Pradesh (East) and Madhya Pradesh in accordance to the bill provided. To recall, previously companies like Paramount Wires and Cables Limited (PWCL), Sterlite Technologies Limited (STL) and Aksh OptiFibre who are cable manufacturers and providers for BSNL’s fibre rollout had asked for government intervention for the outstanding dues on BSNL’s part. Aksh OptiFibre which had outstanding dues to recover worth Rs 85 crore from BSNL had also remarked that bankruptcy threat also looms over the company if the outstanding dues are not cleared.

BSNL’s Financial Situation to Improve

Sandeep Agarwal, co-chairman of the Telecom Exports Promotion Council (Tepc) also remarked about this, “The DoT and BSNL worked together to resolve the vexed payment issue for BharatNet supplies and services with the release of funds to the industry.” The state-led telecom operator is also set to receive a credit line of Rs 3,300 crore which it will use to fund the operational expenses and to clear other dues.

It is worth noting that in the past few years, the revenue of BSNL has taken a sharp dive after the data tariff war. In its revival package, BSNL is rolling out a VRS (Voluntary Retirement Scheme) for its 78,000 employees which will save BSNL Rs 7,000 crore annually. As per Agrawal, the financial situation of the state-led telecom operator is all set to improve by January 2020 as the revenue of the telco comes back to the levels that it was in a year ago, and also the expenditure on wages for BSNL is coming to down.

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Arpit spends his day closely following the telecom and tech industry. A music connoisseur and a night owl, he also takes a deep interest in the Indian technology start-up scene and spends rest of his time spilling poetry and stories on paper.

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