Admittedly, telecom is a great opportunity but the reality is that India is still 160th out of 208 countries in terms of mobile phone penetration, according to the International Telecommunication Union (2021) with even Vietnam and Bangladesh boasting more SIM cards than people. Globally too, there are more SIM cards than people. This means that the brouhaha over the stupendous number of subscribers in India is nothing to write home about.

The focus should be on competent service quality, the cost to the country and having in place a system that lives up to the needs of an inclusive, digital India with returns commensurate given the massive $200 billion in investments that have gone into the space. This comprises an estimated FDI of $40-$50 billion ($1= Rs 84.08) from global telecom giants and private equity firms; investments between $80-100 billion by Indian telecom companies on infrastructure development and service expansion among others; infrastructure and network development investment of around $50-60 billion on investments in towers, fibre optics and other critical telecom infrastructure; in technology and equipment of $30- 40 billion, including expenditure on technology upgrades, deployment of 3G, 4G and 5G networks; regulatory and spectrum fees of around $15-20 billion, payments made to the government for licenses and spectrum allocation and spends on R&D and Innovation of around $5-10 billion for new technologies and services.

These are at best informed estimations. Truth to tell, the magic of the proliferation of handsets was driven by huge investments, much of it from the taxpayers ~ the ongoing Rs 2 trillion-plus BharatNet project is a state-funded one ~ more from public sector and other banks and some from the private players. Much of the investment has disappeared into thin air and while there is no total count of the lost investment. In 2017, when there was a hue and cry about telecom NPAs, some telling numbers were thrown up and the Reserve Bank was worried though there was a divergence of opinion about the exact numbers.

The telecom industry had outstanding debts of nearly Rs 4 lakh crore and industry sources were placing stressed assets in the telecom sector at Rs 80,000 crore. The Economic Times wrote: “While telecom companies are laden with debt of about Rs 5 lakh crore, banks have put the sectoral liability at nearly Rs 8 lakh crore.” An India Ratings and Research Report held that the industry lost about 20 per cent of revenues post the laun ch of free services by Jio and industry debt levels rose from Rs 2.7 trillion in 2014 to �4.85 trillion at the end of 31 December 2016. These telecom debt figures increased to Rs 6 trillion in 2023 and, to go by the ICRA, will be around Rs 6.2-6.3 lakh crore as of 31 March 2025. How did all this impact bank non-performing assets?

The current figures are not readily available but the government conceded that stressed loans by the telecom sector were in the region of Rs 8 lakh crore, the Economic Survey reportedly said that bank NPAs on account of telecom were in the region of Rs 3,465 crore in 2015- 16, which felt like an understatement. Money was being pumped into the sector however and, to go by other numbers available in the public domain, the deployment of bank credit to the telecom sector over 2004-08 to 2014-18 (annual averages in Re-crore) was reported to have increased from Rs 38,300 crore in to Rs 77,000 crore in 2009-13 and Rs 88,800 crore in 2014- 2018.

It is also worthwhile to consider the aftermath of the 10 early entrants who quit the space with enormous losses, underscoring the horrendous resource capture and speculative intent in a very volatile space, where players played ducks and drakes with funds and unviable business models. By 1998, under eight years of the industry opening up, telecom was reporting a Rs 400 crore negative cash flow (profits before depreciation, but after interest and tax) a month. The telecom sector has also been marred by humongous scams. Post the 2G scam, an Economic Times report (February 8, 2012) said that, “The public sector banks have an exposure of about Rs 10,000 crore in the telecom companies whose licences were cancelled by the Supreme Court in connection with 2G scam.”

India’s Comptroller and Auditor General (CAG) alleged that the allocation of 2G spectrum caused a loss of Rs 1.76 lakh crores to the public exchequer, though the former RBI Governor, D. Subbarao contended in recent times that the CAG’s Rs 1.76 lakh crore presumptive loss number was contestable. Instead, he suggested balancing the losses with ‘presumptive gains’ courtesy the overall benefits to the government far exceeding the revenue foregone, using calculations no less robust than those adopted by the CAG. As a sidebar, one might add that the CBI charge sheet placed the loss to the exchequer at Rs 30,984 crore but in December 2017, a special CBI court acquitted former telecom minister,

A. Raja, and other accused in three separate 2G cases, virtually saying that there was no scam. However, the CBI has gone on appeal with the Delhi High Court admitting the CBI’s appeal on 22 March 2024, after six years and 125 listings. To get back to the main question: How underserved the average Indian telecom consumer is, considering the resources that have been sunk into the space since 1994 when the sector was opened up? How wasteful has the country been? The numbers are not credibly computed but the losses and NPAs are huge. Taking big hits to the bottom line or by the exchequer may well be justified had digital inclusivity been achieved or the quality of service to the Indian was a happy one. Regrettably, the reality beats the expectations but who cares because the propaganda beats the performance?

(The writer is a veteran, Kolkata-based journalist)