U.S. satellite broadband provider Hughes Network Systems may have to shut its Indian operations due to unpaid levies owed to the government, which could put thousands of banking services at risk, a company letter seen by showed.
Hughes’ India unit provides services to defense, education and banking sectors in the country and told India’s telecoms minister in a letter dated Feb. 20 that it faces bankruptcy as it can’t pay the 6 billion rupees ($84 million) it owes.
The closure of the company could disrupt connectivity at more than 70,000 banking locations and many critical satellite networks in the Indian navy, army and railways, Hughes’ India President Partho Banerjee said in the letter, which was seen by Reuters.
“This is an SOS request,” he added. The company says the government’s telecoms department had made an incorrect calculation of the dues more than a decade ago which has ballooned to $84 million with interest and penalties.
Hughes, when approached by Reuters for comment, would not comment on the substance of the letter but said in a statement it “remains committed to India” and would continue to provide services to its customers.
Vodafone Idea, which owes $3.9 billion in dues, interest and penalties, has already warned of a potential exit, putting at risk 13,000 employees and billions of dollars in bank loans.
“This, if not resolved, will make the operation unviable thus rendering many customers like banks, other enterprises and critical government networks without any connectivity,” the company said in a separate December letter to the government.
Hughes, which is part of U.S.-based satellite group Echostar Corp (SATS.O), said in December 2018 it had been chosen to provide high-performance satellite broadband system for India’s naval communications network.