- Vodafone Idea, Reliance Communications, Airtel, BSNL & MTNL are major companies facing losses in the telecom sector in India.
- At the same time, Vodafone Idea, Reliance Communications, and Airtel are 3 major players in this industry.
It’s not easy to be a conglomerate and leave long-lasting impressions in the sector where it’s operating. At the time, it’s even difficult to stay profitable throughout the life cycle of the company.
Bigger the company is (in terms of business generated) losses are said to be even more. Today we’ll talk about the largest loss-making companies in India in the telecom sector.
Largest Loss-Making Companies in India in Telecom Sector:
It’s not an easy task to remain profitable in a developing and competitive country like India where the preference of customers keeps changing accord to hype, mood, and schemes!
Before we talk about some of the largest loss-making companies in India, let’s try and know the scenario of the Indian telecom sector.
Indian Telecom Sector – An Overview:
The Indian telecom sector is 2nd largest globally both in terms of fixed and mobile phone connections. There are more than 300 million mobile phone users in India and the figure is said to touch 800 million by 2023!
With this figure are clear with one thing that there is a lot of scope for telecom companies as well as smartphone companies in India.
For the time being, the telecom sector in India is undergoing modifications and changes which is why there is a lot of disruption going on. While some companies are offering (almost) free internet service, some are said to merge and stick together during a dark time.
But all in all, Indian telecom conglomerates are the ones who are also one of the largest loss-making companies in India.
So, Who Are the Largest Loss-Making Companies in India?
All in all, companies who are major telecom operators are the ones who are also one of the largest loss-making companies in India as well. Let’s discover these companies one by one.
Here is everything you need to know why these companies are the largest loo-making companies in India in the telecom sector.
1. Vodafone Idea:
If we were to communicate this news 3 years ago, Vodafone and Idea would have been 2 separate companies. The first one on the list of largest loss-making companies in India in telecoms is Vodafone Idea.
After Reliance Jio entry in Indian telecom sector brought a lot of disruption with itself. One of the biggest disruption telecom companies faced was an amalgamation of Vodafone and Idea together.
Post amalgamation, the major reason for amalgamation is that both the companies will be able to share losses and its shrinking userbase.
If we talk about its losses then the duo has to pay not less than INR 67116 crores to the authority. With dues of more than what one can imagine, it’s got to be one of the largest loss-making companies in India.
Recently the duo came into limelight and expressed that it cannot pay such hefty dues in one go or in a specified timeline because the two might not be able to survive this way.
2. Reliance Communications:
While Reliance communications are the biggest threat to all the telecom companies, it’s also one of the largest loss-making companies in India. (Just Reliance communication and not Reliance Industries Limited.)
With losses lingering around INR 38592 crores, this telecom company is also stuck with authority issues whether to pay the dues or wait for another round of amendments.
After India Reliance Communications entering India, it not only slashed down the price of tariffs but also made extremely difficult for its competitors to match the growing number of userbase and decline in the price of tariffs.
But this company may not be adversely affected because it’s been taken care of by India’s richest tycoon Mukesh Ambani. While we thank Reliance communications for providing us phenomenal internet services, we cannot deny the fact that it’s also one of the largest loss-making companies in India.
Airtel used to one of the premium networks in India. The company kept rolling out creative ads and strategies to woo its users and bring in new ones. A tower every hour and unavoidable TV commercials worked a lot for the company.
But its image, pricing strategy, product planning, and expansion plans were ruined with the entry of Reliance JIO in India.
With losses touching INR 26828 crores, Airtel is fighting at its full potential to survive in the Indian market. There was a time when the Airtel’s stocks went up by 16% when Reliance Communications was asked to pay IUC charges.
But even after lows and highs, Airtel remains one of the largest loss-making companies in India. In fact, Vodafone Idea & Airtel’s losses if combined, the amount is INR 73,000 crores! Scary isn’t it?
But that doesn’t mean that Airtel is sitting back and watching destruction happening without any reactions. The company is said to shut down a tour every hour and the company is said to be launching its own payment services app in India and abroad. The payment services app is the result of Airtel’s collaboration with Western Union.
Our Indian telecom company is also stuck with ongoing competition. Its market share has constantly remained less as compared to the other 3 telcos mentioned above.
In early 2000 the company gained momentum but as the technology changed, advancements happened it just couldn’t keep up with the pace and is not considered to be outdated or unattractive by the new-age users.
With losses of INR 14904 crores, it’s got to be on the list of largest loss-making companies in India. To keep up the competition BSNL is attempting to expand its quality service to its customers.
But altered policies of Central government that encourage private telecom companies, BSNL is finding it hard to crack ideas which can help it maintain the impact, it’s once created as a well-established network across the country.
Last (but not the least) it’s MTNL on the list. Mahanagar Telephone Nigam Limited (MTNL) has opted for a voluntary retirement scheme (VRS) offered by the Central government. More than half of BSNL’s employees have already opted for VRs, close to 80% of them employed at MTNL have chosen the scheme.
VRS scheme comes after BSNL and MTNL’s struggle to compete against already existing telecom giants. Who are not only deep-pocketed but they have technological advancements from time to time and come up with the best of the best offerings.
With losses around INR 3589 crores, there was a time when Centre thought to merge BSNL & MTNL together. There no other reason for MTNL not to be on the list of largest loss-making companies in India.
While these are the major telecom companies, they also happen to be the largest loss-making companies in India.
The telecom sector is still struggling as it has to receive some lakh crores from telecom companies together. Another crazy thing about India’s telecom sector is that even after having so many pending dues, it’s still working, growing and unstoppable. It’s still the world’s 2nd largest market.
So here were some largest loss-making companies in India who are also conglomerates and struggling harder than ever to cut down all the losses.