Just like the U.S., India is also banning Chinese companies on all fronts. As of now, no less than 100 Chinese owned apps will be banned in India. In June, the Indian government prohibited the use of Huawei and ZTE equipment in its network. However, banning Huawei and ZTE comes with its own backlashes. This means that India has just Nokia and Ericsson as its viable options. Well, if Nokia makes good its threat, then it may be left with Ericsson.
According to recent reports, the Indian State Telecom Company (BSNL) owes Nokia arrears worth $121 million. Now, the Finnish telecom giant is threatening to withdraw from the network maintenance support for BSNL.
The Indian laws prohibit BSNL from using all Huawei and ZTE telecom equipment. With its current crises, it has just Ericsson to deal with if it is unable to settle Nokia. That’s not a lot of options for the Indian State Telecom Company. According to Nokia, if the debt is not settled immediately, it will disengage its services.
After Nokia, Ericsson is BSNL’s only option
As of now, Nokia controls about 40% of BSNL’s network. If Nokia makes good its threat, many people will lose their jobs. This is because the operator will be forced to fire some of its employees. BSNL has since promised to pay off the arrears in monthly installments before September 2020. Nevertheless, the Indian operator has not paid Nokia since March this year.
“In view of the COVID situation, we are now facing a huge financial squeeze. It is impossible for Nokia to inject any further funds to maintain the installed equipment, so it cannot continue to provide any further support, including AMC (Annual Maintenance Contract) services,” Nokia said in a letter to PK Purwar, chairman and general manager of BSNL.
Presently, there is no official response from BSNL and its next line of action is not known. The Indian state-owned telecommunications company is the fourth-largest telecommunications company in India. The company is currently at an important moment in upgrading the existing 3G technology to 4G. Due to the loss of Huawei and ZTE’s partners in the construction, the Indian state-run telecommunications company can only re-tender 4G network equipment. Now, it is either it pays its debts or stall its operation. If BSNL does not settle this issue fast, it might start losing its customers due to poor services.