Jobs In Telecom Sector Under Scrutiny Backed By Mergers And Freebies

Debt- ridden and loss struck telecom sector in India faces more problems of corporate downsizing and which will affect nearly 150,000 direct and indirect jobs in the sector, as per industry estimates.

The sector is burdened with debt of nearly Rs 8 lakh crore and heavy losses due to a slew of freebies which are being given out compulsorily by telecom players to retain their customer base.

The Reserve Bank of India (RBI) in April had warned commercial banks about loans given to telecom sector companies. The telecom sector is reporting stressed financial conditions and severe cost-cutting measure seems to be the way out.

Facing the brunt will be around 20,000-25,000 direct jobs, many of which will be due to planned mergers between incumbent players. Mergers alone will lead to over 15,000 job losses as existing portfolios and profiles are duplicated.

However, industry estimates place a far larger number of around 125,000 indirect jobs that will be wiped out due to the turbulence being faced by the sector. An industry analyst told IANS, “In the larger scheme of things, with the economy slowing down and most industry sectors seeing flat or negative growth, the impact is going to be ‘telling and bloody’, with jobs not being created across sectors, and re-employment becoming a tough task.”

The government is under stern pressure for slow economic growth and lower than expected job creation, and will further create problems to indulge unemployed people into alternatives. The sector was amongst the top five largest employment opportunity generators in the country some time back, and supported direct employment to over 20 lakh in the country during 2015-16.

According to the Annual Report 2016-17 of the Department of Telecommunications, “As per some estimates, the mobile industry in India currently contributes 6.5 per cent ($140 billion) to the country’s GDP, and employs over four million people (direct and indirect).”