The telecom sector of India is not going through good times. The FDI inflows to India’s telecom sector has declined to $2.66 billion in FY19. Previously it was $6.21 billion in FY18. This abrupt fall of India Telecom Sector refers to the financial stress in the industry. This regulatory uncertainty clearly shows that the Telecom industry of India is not in good shape these days.
India Telecom Sector Declining Journey
India is not ready to accept the fact and believes that a decrease in FDI every year does not depend on any factor. Historical spectrum prices have left immense pressure on this sector hence affecting its profitability. Due to all these consequences, the industry weighed down by some Rs 8 lakh-crore of debt.
This economic uncertainty is consequently due to the reason that small telcos were forced to leave the India telecom sector in the year 2019. These small telecom operators include Norway’s Telenor, Russia’s Sistema JSFC and Malaysia’s Maxis-controlled Aircel.
On the other hand the large telecom operator like Vodafone India and Jio, Bharti Airtel which reduced the presence of other small telcos in the industry. When it comes to digitization, India might be witnessing the bloom of IT and Telecom; however, when we look into the state of telecom revenues, it is still a big challenge for them.
As Telcos are forced to pay hefty taxes, it has made the financial situation of the country worse and has just built financial stress.