BSNL has been in a serious financial crisis for a while. The state-owned telecom operator is no more in a position to pay salaries or manage daily operations.

HIGHLIGHTS

• BSNL is in serious financial trouble.
• BSNL has been witnessing rough waters since the last few years.
• With the arrival of Reliance Jio on the scene, the condition has only worsened for BSNL.

There was a time, when the state-owned Bharat Sanchar Nigam Limited (BSNL), was among the few telecom operators in India earning profits in excess. The operator was earning profits in excess of Rs 10,000 crores per year. Fast forward to 2019 and BSNL is in serious financial trouble - with an excess debt of Rs 13,000 crore. In fact, it's in such a grave threat that BSNL may soon shut shop.
The telecom operator has been witnessing rough waters since the last few years. With the arrival of Reliance Jio on the scene, the condition has only worsened for BSNL. Compared to its rivals, BSNL has been lagging way behind in terms of services and technological advancements. In an era where everyone is preparing for 5G network, BSNL is testing its 4G network across the country.
So what has gone wrong with BSNL? What will happen to it? Will it survive this time?

What's wrong with BSNL?

BSNL is in extreme financial trouble. The company has been in this situation for a while and the condition has worsened to an extent that it is not able to pay salaries to its employees. In fact, BSNL has requested the government's assistance for a financial aid, which in turn has turned to the banks for help.

How's the government helping BSNL?

The government has requested a loan of Rs 850 crores just to pay the salaries of all its employees for the month of June. To keep the company floating for the next few months, a loan of Rs 2,500 crores has also been requested.

Will the financial aid help BSNL stay afloat?

The requested financial aid of Rs 2,500 crore is just enough to keep the company running for the next 6 months. However, the loan hasn't been granted yet and the pre-existing debt of Rs 13,000 crores may force banks to withdraw any form of financial support.

Why is BSNL in this situation?

According to media reports, BSNL has been in trouble since the last 10 years due to poor government policies and delays in bringing new infrastructure. The inferior infrastructure, as well as the company structure, have further resulted in this situation. Even the Department of Telecommunications has asked BSNL not to go to banks for getting more loans.

Will BSNL survive?

This is a the question that nobody can answer right now. BSNL is in such great debts that lenders are wondering how the company is going to repay the loans. Even if the relief of Rs 2,500 crores is granted, it will be a matter of a few months before BSNL finds itself in trouble once again.