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BSNL flags competition issues, may feel ‘stress’ this fiscal

LiveMint logoLiveMint 13-06-2017 PTI

New Delhi: State-owned Bharat Sanchar Nigam Ltd (BSNL) on Tuesday expressed concern that it is likely to feel the ‘stress’ this financial year because of intense competition and asked the telecom department to speed up its receivables.

BSNL officials met the inter-ministerial group in New Delhi Tuesday as part of the ongoing dialogue between the industry and the government to discuss the sector’s financial headwinds. “BSNL is not facing any problem in raising loans and already has a credit line available,” people familiar with the matter said after the 30-minute meeting with the IMG.

“BSNL is likely to feel the stress this year... we did not feel it last year,” a senior BSNL official admitted. Asked about the nature of the stress, the official said it was to do with mobility vertical in the face of competition.

MTNL chairman and managing director P.K. Purwar said the corporation needs “government support” for availability of Rs8,000-10,000 crore capital over a period of time. MTNL has also sought government aid for its high employee cost — a tab of Rs2,800 crore. “We have legacy issues... the high employee cost needs to be addressed through options like VRS,” he suggested.

Citing instances of Airtel, Vodafone and other private operators, Purwar said these companies are being supported by their promoters. The government is the promoter of MTNL and hence “should not be found wanting” in support with regard to capital requirements of the telecom company.

The IMG is meeting various telecom operators and banks this week to discuss the financial issues of the industry. The sector is reeling under Rs4.6 lakh crore of debt and its revenue and profitability are facing strains following free offerings from Jio.

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