This sector is undergoing the stress and strain of high cost of spectrum acquisition, licence fees and a huge debt burden. Every telecom player is facing the challenge of constricting margins and attrition of subscriber base to competition due to reasons ranging from better technology to connectivity to rate discounting. With tele-density increasing to over 90%, the fact remains that around 95% of the voice subscriber base is on prepaid service and operates with multiple SIMs. There is a sense of urgency in the sector, with every player trying to get their subscriber onto Data and VAS and get the ARPU up, as dependence on only Voice is no longer viable. Moreover, in the predominant GSM network, the top 3 players have been difficult to dislodge due to lack of seamless connectivity and/or Data play.
The pressure on margins and valuation resulted in consolidation for the sector. Tata Teleservices, Telenor and Videocon sold out to the market leader and Aircel filed for bankruptcy. Two other players, Idea and Vodafone, are stitching together a merger.
While all of the above happened, one watershed event in the industry was the launch of 4G Reliance Jio. With aggressive pricing, it has taken the margins in the business to a new low. Since Q3 of FY 16-17, the competing players have been seeing declining revenues, with margins declining and even profits turning negative.
There is surplus talent in the sector right now which is going through the throes of correction. It has now turned into a net supplier of talent: talent which is adept at multi-tasking, handling multiple variables in a dynamic business. It is for other industries to be open to such skill sets.