In less than two years, the landscape of the Indian telecom industry has changed from being the most promising and flourishing sector to a struggling outfit facing uncertainty and price pressures.
Following the announcement of the Supreme Court to cancel 122 2G telecom licenses, which led to the closure of a few greenfield operators, the fear of job losses, crashed incentives and hiring freeze is back. (See New Telcos Adopt Quit India Policy, 2G Verdict: An Easy Exit Route or Fresh Troubles? and 2G Verdict: SC Cancels 122 Licenses.)
While corrupt business practices and inadequate governance may be touted as the top causes for this downfall, the axe has fallen on the employees with their careers at stake. Going by the verdict of the recruiters, telecom executives have pressed the panic button. Recruiters claim that a number of resumes of telecom executives are now floating around in the market.
It's difficult to put a number on the anticipated job losses. What is clear is that the number will be huge. At Etisalat DB Telecom India Pvt Ltd., around 2,000 are expected to lose their jobs. Even with skeleton staff and operations only in six circles, S Tel will have at least 200-300 employees. Uninor is believed to have 17,000 employees onboard. Etisalat and S Tel have declared their intentions to close down India operations but Uninor has asked the Supreme Court to review its decision.
"We are stunned to receive job applications of many senior executives from the telecom sector. What is noteworthy is the fact that their position may not be under threat, but it's the anticipated crisis which has made them feel nervous. As the government is delaying its policy measures and everything is hanging, there is a lot of vagueness and anxiety within the employee community," says a senior recruitment executive at People Strong.
Unclear Picture
One of the biggest problems in India is poor disaster management policies of the government. Its ironical that while the government took no time in cancellation of licenses, no measures were announced to protect the interest of the employees or stakeholders.
"It seems as if the present scenario has provided telecom companies an opportunity to kick out people on the basis of performance parameter. On one hand they are letting managers go citing performance criteria, on the other hand they continue to hire people at entry level or at bare minimum packages," shouts an executive currently employed with a network giant.
There was a time when almost every operator had big plans and made hefty investments to cash in the 3G opportunity and the growing subscriber base, but the growth has now become standstill and 3G is still far from being a profitable model. (See A Disappointing Year!, Idea's Brand New 3G Plan and Industry Slowdown Triggers Strategy Rethink.)
Vendors like Nokia Siemens Networks (NSN) are already facing the heat and have announced massive job cuts in a bid to remain profitable. If new players face a struggle, it means a challenging scenario for the Chinese vendors. They will be at a major loss because new players had opted for Chinese equipment in an effort to control their costs. According to various reports, NSN is likely to lay off around 2,000 executives in India.
According to a senior HR professional employed with a top telecom vendor, its the employees from NSN and ZTE Corp. who are aggressively looking at new options in the market. While NSN has recently announced to cut 17,000 jobs worldwide, ZTE is struggling with tough margins. (See , NSN To Shutdown Kolkata Unit? and IndiaWatch: NSN Could Cut 2,000 India Jobs.)
The picture isn't any good for operators as well. Service providers like Bharti Airtel Ltd., Aircel Ltd. and Reliance Communications Ltd. had restructured their operations last year. This had led to anxiety in the employees with some of them losing employment. The Supreme Court verdict added fuel to the fire and enhanced anxiety in the sector.
The present job market is a testing ground for new management graduates who have done specialization in telecom. "Its tough, if not worse. The sector is expected to stabilize once new policy measures and consolidation take place, but the days of aggressive hiring and double-digit hikes are not in sight," says Sudesh Kumar, Chairman and CEO, SPPN Consultants.
The industry experts are not discounting the fact that the fundamentals of India's telecom story are still strong and that positive sentiments will be back soon, the present job market seems to be far from that.
-Jatinder Singh, Principal Correspondent, Light Reading India
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