Bharat Sanchar Nigam (BSNL), the state-owned telecom company, has again approached the Government for funds to pay the June salaries of its staff, which work out to about Rs 850 crore.
With the Company already reeling under a debt of about Rs 13000 crore, it is clear that it will not be able to survive without financial assistance.
In a formal letter, BSNL has requested the Government to decide what the next course of action for the Company should be.
With BSNL having been unable to pay the salaries of over a lakh staff members in February, it is clear that the fully government-owned establishment has suffered the brunt of the price war going on between private telecom companies.
The accumulated operating losses of BSNL were reported to have been well over Rs 90,000 crore in December last year.
However, not only did the Government fail to come up with a concrete recovery plan, it also overruled suggestions to close down the Company.
The telecom sector, in general, has been struggling with dropping tariffs, decreasing profits, and mounting debt, due to stiff competition from Reliance Jio. Free voice calls and SMS being offered by Jio in the market, along with competitively priced data plans, have adversely affected the margins of private operators too. Most are struggling to offer prices that match with the offerings of competition.
In March 2019, Jio boasted the highest subscriber base f 306.7 million for its broadband service Airtel came in second with about 114.6 million subscribers, followed by Vodafone Idea with 110.2 million. However, BSNL had only 22.14 million subscribers.