Telecom woes: BSNL expects normalcy in liquidity position by September quarter; predatory tariff hits revenue
New Delhi: The Bharat Sanchar Nigam Restricted (BSNL) administration is making all efforts to ease liquidity strain being confronted by the corporate, and expects normalcy in liquidity place to be restored by the September quarter, based on a senior official of the crisis-ridden public sector enterprise (PSU).
BSNL director — finance, S Okay Gupta has shot off a letter to all chief normal managers of telecom circles, flagging the “fiercest ever competition” being confronted by the telecom sector and stated “predatory tariff offerings by the competitors” has triggered a pointy decline in income from providers.
“The BSNL management is making all-out efforts to ease the pressure on liquidity. It is expected that in the near future, the liquidity position of the company will start improving,” Gupta stated within the letter dated 16 Could.
He asserted that normalcy in liquidity place is anticipated to be restored by the following quarter.
BSNL has been in a position to maintain its buyer base, regardless of the persistent strain of competitors on its income.
“The telecom sector being capital intensive, wherein even to remain in business ‘or’ to ensure business sustainability, the service providers are required to invest in newer technologies at frequent intervals, as technologies evolve at a very fast pace,” the letter stated.
The cumulative impact of those components has resulted within the liquidity crunch, Gupta added.
The letter assumes significance as distressed telecom PSUs Mahanagar Phone Nigam Ltd (MTNL) and BSNL are saddled with huge debt and have confronted issues in clearing workers salaries within the latest previous.
The federal government is within the means of understanding a rescue plan for MTNL and BSNL within the type of a revival bundle that entails parts like voluntary retirement scheme (VRS), asset monetisation, and allocation of 4G spectrum.
Total, the telecom sector has been battered by falling tariffs, eroding profitability, and towering debt, within the face of stiff competitors triggered by disruptive choices of Reliance Jio, owned by richest Indian Mukesh Ambani.
The relentless tariff warfare that ensued after Jio’s entry into the telecom sector with free voice calls and SMS, bundled with low cost information has led to strain on margins of even non-public operators which have scrambled to match the competitors.
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