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Mumbai, NFAPost: Nokia, leading telecom giant headquartered in Finland, has given an ultimatum to BSNL to pay back dues worth Rs 910 crores immediately.

According to Financial Express report Nokia has threatened to pull out support for maintaining BSNL’s network. Nokia is facing the consequence of maintaing staff to run the service for BSNL

BSNL has not made payments to Nokia since March, despite its commitment to clear the dues in monthly instalments by September 2020.

Nokia said in a letter to BSNL Chairman and Managing Director PK Purwar, a copy of which was also marked to Telecom Secretary Anshu Prakash, that given the Covid-19 situation the company is now under the tremendous financial crunch.

“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,” state Nokia.

The company, which controls nearly 40% of BSNL’s network, has also warned about job losses as it will be forced to terminate employees, who are dedicated to the state-run firm. 

BSNL is reeling under debt bunden even after government support. This is already compounded by Covid-19 pandemic impact on business.

The Central government already formulated the Rs 70,000-crore revival package in October last year to help BSNL tide over the current financial mess. In the backdrop of this decision, the finance ministry approved issuance of a sovereign guarantee of Rs 15,000 crore to BSNL and MTNL.

The decision will enable the two companies to raise money by issuing long-term bonds and restructure their existing debt and meet some capex requirements. Both firms have around Rs 40,000 crore of debt on their books. 

Besides VRS expenditure of Rs 29,937 crore, BSNL is also facing Rs 23,814 crore towards administrative allocation of 4G spectrum and a sovereign guarantee of Rs 15,000 crore. The department of telecommunication (DoT) got the mandate to review proper utilisation of the guaranteed funds and will also review the guarantees annually to ensure that there is no risk of default in repayment of loans together with interest.

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