Like other telecom companies in India, BSNL too has been facing stress since the entry of Reliance Jio in the telecom market. (Photographer: Dhiraj Singh/Bloomberg)

BSNL Told To Put All Capex On Hold, Stop Issue Of Tenders

The telecom department has asked state-owned Bharat Sanchar Nigam Ltd. to put all tenders and purchase orders on hold, as the company is facing a financial crisis, official sources said on Tuesday.

In a June 12 order, BSNL’s finance department directed all its circle heads to take prior approval of the corporate officer in Delhi before floating any new tenders for capital expenditure, the sources said.

"The order issued to circle heads on June 12 says that BSNL is facing a temporary financial crisis and is not in a position to clear the accumulated liabilities," said a BSNL official, requesting anonymity.

According to the BSNL official, the telecom firm’s finance department received the direction from the finance wing of the Department of Telecommunications to put on hold all capital expenditure.

The order has asked BSNL officers to put in abeyance advance purchase orders and purchase orders of tenders that have been already finalised till further instruction.

BSNL posted an operating profit of Rs 672 crore in 2014-15, Rs 3,885 crore in 2015-16 and Rs 1,684 crore in 2016-17.

Like other telecom companies in India, BSNL too has been facing stress since the entry of Reliance Jio Infocomm Ltd. entered the market.

In June, BSNL Director (Finance) SK Gupta shot off a letter to all chief general managers of telecom circles, flagging the "fiercest ever competition" being faced by the telecom sector and said "predatory tariff offerings by the competitors" has triggered a sharp decline in revenue from services.

While promoters of private telecom operators, including Reliance Jio, are investing thousand of crores, BSNL is awaiting government decision on allotment of 4G spectrum to compete in the market.

The company is estimated to have the largest optical fibre cable network of 7.5 route km that can help it build a high-speed broadband network. However, it needs to purchase equipments to expand services. BSNL has sought government approval to monetise its real estate but the decision in this regard is still pending.

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