India’s Telecom Debacle continues to burn and destroy….
How it all began….
Way back in 2008, the Indian Telecom industry entered another phase of exciting growth. New licenses meant new players in the already overcrowded field. Hectic recruiting meant employees were headhunted, at times hired with obscene salaries. It was a good time to working in telecom, careers got fast-tracked, and people were retained with higher pay and higher grades.
To retain talent, companies gave promotions every year, executed an illegal ‘No-Poach’ agreement with their competitors to avoid the bloodbath. Good time!
But alas! Like all good things, this bubble burst too!! CAG came out with a report of Rs.1, 30,000 crores loss to the government exchequer, apparently due to the telecom licenses given out at rock bottom prices to favored parties of the Telecom ministry.
Cases were filed in courts and finally by 2012, all erroneously issued licenses were canceled, operators shut down circles and employees suddenly found themselves on the street, literally. No one called them with new opportunities, the erstwhile head hunters stopped taking were returning their calls. It was bad, seriously bad. They were not at fault, but they paid the price.
The CAG lets the Cat loose among the Pigeons
Now, going back to the CAG calculation which started this landslide (or domino effect, call it what you will), the basic tenet was faulty. They calculated that by selling spectrum bundled with licenses, the entire thing was undervalued. At values generated during the 3G auction, those spectrums were sold at dirt cheap rates.
Though in comparison that may be the case, it begs one question. Is it fair to compare the value of an asset today with its selling price 2-3 years back? I don’t think anybody had a fair idea in 2008 that 2G spectrum could be valued at the same rate as 3G spectrum 2-3 years down the line? I will give an example to elucidate my point.
Suppose I sell land today at Rs.100000 per acre. Two years down the line, land value in the area appreciates due to improved business sentiments and is now at Rs.1000000 per acre. I did know that 2 years back, so it is not a deliberate act to sell the land cheap. And juvenile to compare the rates two years hence, all factors not being equal.
Yes, the process to allot that spectrum may have been financially motivated, biased towards some, or even acquired mischievously. But the Supreme Court’s decision to quash those licenses meant the loss of livelihood of thousands, and they were not remotely guilty of any wrongdoing. Because a house has been robbed, alongside catching the robbers and punishing them, the house has been demolished, the occupants rendered homeless!
How unfair is that? Could the Supreme Court not give the companies a fair valuation of that spectrum and ask them to pay the difference, while punishing those who indulged in unfair means? Knowing fully well that their action is going to affect the lives of thousands, is this the right course for justice to follow? No, it isn’t.
The employment market since then has been devastatingly cruel to telecom professionals. They have had to gravitate to other industries because demand dried up and supply multiplied. Telcos started to dictate terms, accept a salary cut if you want to join us. Go to a remote place to work with us, the bullying started.
Not so suddenly, Telecom was no longer the coveted industry to work in. Survivors hung on grimly to their posts, knowing full well that if they tried to leave, there may not be any other Telco willing or able to take them on board. The situation is not going to change now, lives and careers have been shattered, those who are there cling on, most have moved on with their lives.
But it is undeniable that the judiciary and the political arms of the country have crushed many dreams and aspirations, lives, and families in one fell swoop of righteous judgment. To right one wrong, they have burnt a world of aspiring careers and promising lives.