With nearly a billion subscribers, India’s telecom story was like no other in the world. However, past six months show that the sector may have bitten more than it could chew and Reliance Jio just added to its burgeoning debt problems.
When the government began auctioning licenses and spectrum, or electromagnetic waves for the transmitting of data and sound to mobile phones, back in 1994-95, the spectrum put out for sale was 4.4MHz of 900MHz band.
Very little in comparison to what the past two years’ spectrum auctions have been. Last year, a six day ‘mega’ auction of 2,354.55MHz put up for sale garnered a total of Rs 65,789.12 crore as against a 34-day auction in 2010 which brought in Rs 67,718.95 crore.
However, it was déjà vu for the telcos as India Ratings back in 2015 warned the industry of increased debt and consolidation in the years to come.
Indian telecom major, Bharti Airtel, in its 2016 annual report disclosed its net debtat Rs1,00,000 crore, as reported by Bloomberg on June 4. The company’s FY17 consolidated revenue stood at Rs 62,276.3 crore.
The Bloomberg report showed Vodafone India’s net debt at Rs 80,000 crore; Idea Cellular at Rs 45,000 crore; Reliance Jio at Rs 40,000 crore; Reliance Communications at Rs 42,000 crore and Tata Teleservices at Rs 30,000 crore.
By Baishakhi Dutta
