State of BSNL & MTNL

pothi said:

I was wondering how the union government can spend for revival of BSNL/MTNL when there is already some fiscal deficit. We got the answer today, just a day after the announcement of revival package... SC order means fines on Vodafone Idea, Airtel can fund BSNL, MTNL revival plan

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So they're going to kill or impact way more efficiently run pvt. sector companies to fund these lazy and corrupt leeches? Damn! Politicians never learn!

But then not so fast, Vodafone/Idea sinking is going to be an indelible black mark on the Govt's so called "business friendly policies". Who the heck will want to invest in this country especially in the core sectors?! I believe the Govt. has a lot of thinking to do.

@C3PO
Wasn't this case going on since 15 years? It's got nothing to do with the current government. If government backs out and does not take any money from VIL/Airtel, it also sends a wrong signal that in India one can get away with any unethical accounting practices.

It's a tricky situation to be honest and ease of doing business does not mean you hide your actual revenue from the govt and pay lower taxes. AVoId gamed the system back then and now the system is gaming them.

I think, VIL are done here. Someone super rich like Adani/tatas/Jeff Bezos/Mark Jokerberg should really think hard about entering the telecom sector and buy out VIL assets without their debt and start a new Telecom company. We need some competition for Jio.

Businessman do business to make money i don't think anyone wants to enter a loss making sector, Jio has great support from modi goverment, all Trai rules are bend for them, don't thing a sane person will enter this sector.

sanke3 said:

Wasn't this case going on since 15 years? It's got nothing to do with the current government. If government backs out and does not take any money from VIL/Airtel, it also sends a wrong signal that in India one can get away with any unethical accounting practices.

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Yes, this case is about 15-16 years old and there were contentions on how AGR is calculated, but the amount due to the Govt is so large it will wipe out VIL from the market.

It's a tricky situation to be honest and ease of doing business does not mean you hide your actual revenue from the govt and pay lower taxes. AVoId gamed the system back then and now the system is gaming them.

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Oh absolutely, I know they were gaming the system which is why now they're asking for relief from the Govt in terms of deferred payments and lower or no interest to be paid.

I think, VIL are done here. Someone super rich like Adani/tatas/Jeff Bezos/Mark Jokerberg should really think hard about entering the telecom sector and buy out VIL assets without their debt and start a new Telecom company. We need some competition for Jio.

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A bit of background, I am from the IT+telecom line having implemented software, mostly BSS, systems for a couple of very large European and one Indian telcos. Anyway, the day these two companies were forced to merge courtesy Jio's onslaught I knew it was only a matter of time before VF pulled out. The writing was on the wall. They simply don't have the stomach or the wherewithal to stay on in India. VIL Mgmt pre-merger cost saving and efficiency gain promises aside, what happened post merger is a mess, they simply haven't been able to recover from the setbacks of the past 3 years. VIL QOS is/was low. I was on both networks once upon a time and had to shift to Jio because of the savings offered. This doesn't bode well for any company and the worst part is they still losing customers to Jio a clear indication they haven't pulled up their socks. This SC ruling is another nail in the coffin.

The current state probably means Vodafone will sell their stake at fire sale prices to a pvt. equity fund or other investor and exit India.

And yeah, at this rate, we can say goodbye to any serious 5G spectrum bids.

Even aafter all this drama, the government wants to hold 5G Auction and wants to sell airwaves at an exorbitant price.

One more thing - VIL sinking will cause turmoil in the banking system they have thousands of Crs in loans that was used to purchase spectrum. VIL is too big to fail IMO, the Govt will have to go easy on them.

Bank stocks fall over loans given to telcos

In this case, we should not blame the government for a verdict in their favour for a case which was running for 15 years. While government’s intentions seem to be questionable many times, Jio was asking for 0 paise interconnect charges but govt (TRAI) stuck to 6 paise per second to help VIL and Airtel. Jio knew all the loopholes from obtaining spectrum during Congress time to unlimited trials during BJP time. We can say that the Ambanis know their shit and they have legal support from all eminent lawyers, CAs on how to game the system irrespective of any government in power.

I would love to discuss be a part of this discussion, but let’s make a different thread. 🙂

What a strategic move!

I expected something similar. Merge BSNL and MTNL and then sell wireless services to private or lease fiber and other assets. Looks like GOI is going in that direction (or worse).

It is okay if they sell the wireless division to a completely third party. If they sell it to Reliance, then consumers may be left with monopoly or duopoly.

@pothi Link is down.

Thanks for notifying. Fixed it now.

This report is contrary to the revival announcement by the government.
These steps look like the government is desperate to make the telecom a monopoly of RIL.
With these fines slapped on VIL and Airtel the industry is in a free fall.
Vodafone will exit india this might be end of Vodafone-idea or Idea might buy back the Vodafone shares which will leave idea in more financial distress.
Airtel may survive this but will have very poor financials and might loose the QoS for which it is known for.
If the government wants to disinvest from BSNL and MTNL they should atleast ease up the 90,000cr Fines on Private telcos.

Very strange to see BSNL selling 4G SIMs on road side today. Now these people are getting some brains. It was people from exchange who had set up these temporary counters.

Another delay in salary and the delays are going to be there for the next few months. Ref: BSNL to open VRS window on Monday; October salary not credited, yet

So I finally gave up on the landline. Felt a lil sad though