Published On:April 9 2020
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COAI seeks clearance of ₹20,000 crore PSU dues.

The Cellular Operators Association of India (COAI) has written to the department of telecommunications (DoT) to clear ₹20,000 crore of dues from public sector units (PSUs) such as Bharat Sanchar Nigam Ltd. (BSNL) and Mahanagar Telephone Nigam Ltd. (MTNL).

Member companies in the segments of telecom and network equipment manufacturers, and infrastructure providers, have been long-term partners of various PSUs, including BSNL, MTNL, and have been providing respective material, support and services to these PSUs for all their telecom network and service requirements, COAI director general Rajan Mathews said in a letter to DoT joint secretary Anshu Prakash.

COAI represents Nokia, Huawei, Ericsson, ZTE, Sterlite Technologies Ltd (STL), Indus, Cisco, Juniper, Qualcomm, Apple, Ciena, ECI, Facebook, Google, Amazon and ACT, among others, who support critical essential services.

“Our members have been supporting various PSUs in delivering uninterrupted services, despite non-payment of their huge pending dues. However, the situation has become highly critical now with total outstanding dues from these PSUs amounting to approximately ₹20,000 crore, which is pending for long. This is adding to the financial woes of our members who are facing serious constraints in terms of cash flows because of the slowdown in economic activity in the current situation," said Mathews.

The business continuity of these vendors and service providers has been severely impacted by the spread of the contagion across the globe and the restrictions imposed by the governments to combat the situation, he said.

A severe disruptive impact has been witnessed on the global supply chain, demand and supply elements, and most importantly on the cash flows of the companies because of the slowdown in economic activities, Mathews said.

This in turn is having an impact on all payments, including for employees, interest, loan repayments and taxes, he said.

There has been a considerable increase in network load from enterprises, as well as residential connections since the lockdown was imposed. DoT officials familiar with the matter said there was a 10% increase in network usage, though COAI has estimated an almost 20% increase.

Telecom and allied services have been identified as essential services to support business continuity plans of industries, with companies being forced to move their employees to work from home. Last week, telecom infrastructure provider STL noted that their collections were delayed because of unavailability of manpower in the offices of customers. “In terms of data usage, most regions in the world are seeing 30-100% increase in the traffic on the network. A significant amount of this traffic is coming from enterprise use cases such as video conferencing, collaboration tools like slack and increase usage of web-based applications on the cloud," said STL.

Last week, COAI had reached out to finance minister Nirmala Sitharaman to address the financial concerns of telecom operators. It had urged the government to refund unutilized input tax credits, provide low-cost funding, rationalization of levies and reduction of spectrum usage charges.

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