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Bharat Sanchar Nigam Ltd (BSNL), a state-run mobile network provider of India, has deferred payments on internet bandwidth imported from Bangladesh despite scrapping its deal four months ago.
"BSNL is seeking some additional time to clear the dues and will hopefully do so by September," said Mashiur Rahman, managing director of Bangladesh Submarine Cable Company Ltd (BSCCL).
Due to a serious lack of revenue, BSNL can no longer afford to import internet bandwidth from Bangladesh and suspended its deal with BSCCL on February 7, ending a four-year partnership.
BSCCL is owed Tk 6.39 crore by the Indian telecommunications carrier, who has not made any payments since September 2018. The Indian company cited the Covid-19 pandemic as the reason behind the deferral, Rahman told The Daily Star yesterday.
"While it is true that the coronavirus pandemic has unavoidably pushed everyone into hard times, we will take strong measures if they [BSNL] fail to keep their new promise."
For nearly a year, BSNL has struggled to make payments to its staff and vendors, many of whom have sought Indian Prime Minister Narendra Modi's intervention to recover the dues, according to Indian media reports.
BSCCL apparently has no qualms against using a similar approach to collect what is owed.
"We decided to wait until September but if we do not get the money by then, we will have to use diplomatic methods," Rahman said.
In June 2015, BSNL signed an agreement to import 10 gigabits per second (Gbps) of bandwidth for the Northeastern state of Tripura through the Akhaura-Agartala point.
BSCCL began exporting bandwidth to BSNL on February 8, 2016 and continued until February 7 this year.
Last November, the country's lone submarine cable company was informed that BSNL would no longer continue to import bandwidth because of a dearth of revenue despite huge demand for internet services in the Northeastern Indian states, such as Tripura, Meghalaya and Assam.
Most Indian mobile network providers in remote areas source bandwidth from the country's heartland. However, due to the vast distances covered in hills that the bandwidth must travel, services levels tend to be unsatisfactory.
This prompted companies like BSNL to import bandwidth from Bangladesh to cater to the areas closer to the border.
BSCCL earned Tk 9.6 crore in the first year of the agreement with prices set at $10 per Mbps. Later, the price was revised twice to bring it down to $6.
When the deal was initially inked, BSNL had hoped to increase its internet bandwidth imports up to 100 Gbps within a year, according to BSCCL officials. However, the Indian company could never consume even 10 Gbps bandwidth despite the huge demand in Tripura. Its consumption rate never exceeded 8 Gbps.
"India's private sector has outplayed BSNL," Rahman said.
Under the arrangement, BSCCL received Tk 5.46 crore annually but this value seems smaller considering that local companies contribute around Tk 50 crore in revenue to the submarine cable company.
"From the business point of view, the deal did not involve a huge amount of money but it was a matter of pride for the country," he added.
BSCCL has long been holding talks with private companies from the neighbouring country. However, the discussions are yet to translate into formal agreements due to bottlenecks.
Currently, BSCCL supplies about 1,100 Gbps of bandwidth to the local market, while another 500 Gbps is imported from India through Benapole.
The state-owned firm has two existing undersea cable connections – SEA-ME-WE 4 and SEA-ME-WE 5 – with a combined capacity of 2,600 Gbps and plans to install a third cable to meet the country's growing demand.
It raked in Tk 58.58 crore in net profits for fiscal 2018-19.
BSNL has reported losses since 2010 and is estimated to lose a further 14,202 crore rupees in FY19, according to a report of the Business Standard of India.
The public sector firm's provisional loss was 4,859 crore rupees in 2015-16, 4,793 crore rupees in 2016-17 and 7,993 crore rupees in 2017-18.
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