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Finland's Nokia Threatens to Cut Ties With Indian State-Run Telco Over Dues Crossing $121 Million

© REUTERS / Antti Aimo-KoivistoThe Nokia headquarters is seen in Espoo, Finland April 6, 2016.
The Nokia headquarters is seen in Espoo, Finland April 6, 2016. - Sputnik International
New Delhi (Sputnik): Amid border tensions, India is considering the participation of Chinese tech players like Huawei and ZTE in the sharpening and development of its 4G and 5G networks. At this time, India’s state-run telco Bharat Sanchar Nigam Limited (BSNL) is clouded by risks of losing non-Chinese equipment maker Nokia over unpaid dues.

Finnish telecom equipment maker Nokia, which controls 40 percent of BSNL networks in India, has threatened to pull support if dues mounting over $121 million are not cleared “immediately” by the Indian state-run telco.

In a letter addressing BSNL Chairman PK Purwar, Nokia has also warned that if the dues are not paid off, it might have to resort to staff layoffs in a bid to cut costs.

BSNL earlier committed to clear the dues it owes to Nokia in monthly installments by September 2020. However, it has failed in making the payments since March 2020.

“The non-payment by BSNL has adversely affected our cash flow which will now force us to take some major cost-cutting measures to sustain ourselves in these difficult times, including terminating our employees dedicated to the BSNL account", the Finnish gear vendor was quoted as saying in a letter also marked to Telecom Secretary Anshu Prakash.

"Given the COVID situation we are now under tremendous financial crunch and it would not be possible for Nokia to infuse any further capital in maintaining the installed equipment and hence continue any further support including AMC (annual maintenance contract) services", it added.

The firm has sought immediate payment of over $121 million along with accrued interest. 

At present, BSNL's reaction to the letter, as well as its plan for the next line of action remains undisclosed. 

In July, the central government instructed BSNL not to rely on equipment from Chinese players for 4G upgrades after India lost 20 soldiers in a face-off with Chinese troops in Ladakh in June 2020.

Amid the chaos, the Indian government is rapidly pulling out of multi-million dollar projects with China. Indian analysts have also said that the country must refrain from letting China get too involved in the high-speed internet-enabled future of India’s tech infrastructure.

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