State-run BSNL has cleared 50% of payments due to vendors like Nokia and ZTE, which run the wireless network of the telecom company. It has also cleared a similar percentage of dues of other smaller vendors like UT Starcom.
According to sources, a loan of around Rs 1,800 crore helped BSNL clear dues of Rs 500 crore of Nokia and Rs 400 crore of ZTE. The company had defaulted on payments for the past few months, which had made the vendors jittery.
In September last year, BSNL raised Rs 8,500 crore through issuance of sovereign bonds. The funds were meant to be utilised for retiring debt and meeting capex requirements. The state-run company has a debt of over Rs 20,000 crore on its books.
Most vendors have in the past written several times to BSNL and the department of telecommunications (DoT) seeking payment. The release of payments will help bring back vendors’ confidence.
The company is trying to fast-track the rollout of 4G and has suggested a couple of options to the government. It wants to come out with a new tender for 50,000 sites, allowing firms global like Nokia and Ericsson to participate. Currently, around 60% of the network is run by Nokia, while ZTE controls the remaining 40%.
The company has communicated to the government that its survival depends on early rollout of 4G services and so far, there is no proven Indian core available. It fears that barring TCS, which has tied up with C-DoT to develop a core, others may not be successful. Even if domestic vendors are successful in trial runs, they would take time to produce requisite quantities, which would delay the rollout of its 4G services, BSNL has said.