We all enjoyed, the free for all service, from Jio and we all thanked Mr. Ambani for providing us with Free Data and what not.But most of us seemed to have missed out the real implications of this Free Bonanza. Our Nationalised Banks have financed all major telecom companies in our country i.e Airtel,Aircel, Reliance etc. With the entry of Jio and its introductory Free Offer the revenues for other competitors have been declining. So much so that the Chairman of SBI some time back in June 2017 wrote to the Govt. to give these companies an extension of 10 years for payment of spectrum Fees.This extension would have helped the teleco's by providing them with liquidity to repay what they owed the banks .
SBI Chairman's Letter
In a more recent development Aircel is planing to file for Bankruptcy before the National Company Law Tribunal. The Total exposure of Banks to the telecom Sector is around Rs 97,000 Crores. Which is definitely a significant amount. The Jio Storm has hit the Telecom Companies hard and the increased additional burden of GST has broken backbone of the telecom majors.
Aircel to File Bankruptcy
Mr Arun Jaitley in Rajya Sabha
With Aircel opting for Bankruptcy and other telco's reeling under stress the future looks very bleak for the Telecom Sector. If major teleco's fall this could adversely affect the banks and a large chunk of the population could watch their employment vanish into thin air.Already the workforce of other Telecom Companies has been reduced by 25% after the entry of Jio.