Nokia threatens to quit India’s BSNL, unless $120m debt is cleared immediately

Published: 5 August 2020 - midnight

Finnish mobile network equipment provider, Nokia, has said that it will be forced to pull out of supplying equipment to India’s state owned telco BSNL, unless the company clears its debts “immediately”.

A report in India’s Financial Express claims that BSNL currently owes Nokia $120 million (910 crore rupees) for base stations, software and other network infrastructure components.

Nokia is responsible for around 40 per cent of the network equipment comprising BSNL’s networks. The Finnish tech giant has warned that BSNL’s reticence to make payment of its outstanding dues is starting to have a serious impact upon its financial performance and has warned that it may be forced to make job cuts.

“Given the Covid situation we are now under tremendous financial crunch and 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,” Nokia said in a letter to the BSNL chairman PK Purwar, seen by the Financial Express. Nokia also sent a copy of the letter to India’s Telecom Secretary Anshu Prakash.

In total, BSNL owes Nokia $120 million (910 crore rupees) with around $80 million (600 crore rupees) remaining unpaid since at least January 2020. Nokia warned that BSNL’s continued non-payment could force it to make redundancies from its workforce.

“The non-payment by BSNL has adversely affected our cash flow which will now force us to take some major cost cutting measures to sustain ourselves in these difficult times, including terminating our employees dedicated to BSNL account,” the Nokia letter continued.

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