Telecom sector set to see increased hiring activity in FY20 with the advent of 5G; expects 5% increase in manpower

Telecom sector, which is going through a phase of consolidation, is set to turn a net hirer in FY20, with an expected 5 percent increase in manpower, a media report said citing industry executives.

According to The Economic Times, the sector which lost over 1,00,000 employees in the last two years, is planning to recruit from companies such as Microsoft, Google, Tata Consultancy Services, HCL Technologies, Ericsson and Nokia.

Due to the consolidation, the industry saw almost no hiring activity in the last two years. The newspaper report citing an industry expert said that the advent of 5G is one of the main reasons why the industry, including handset makers, original equipment makers (OEMs) etc., will hire people.

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The number of telecom operators has now reduced to about five from a peak of 15 in 2012, according to a report by domestic rating agency Crisil's research arm.

"The telecom sector moving towards an oligopolistic structure, with three players accounting for more than 90 percent market share, will pose challenges for towercos," it said.

Representational image. Reuters

It said the merger of Vodafone and Idea Cellular to create the largest entity by subscribers alone has resulted in over 57,000 tenancy losses for the towers industry as the combined entity consolidated its network.

A further reduction of 21,000 tenancies is expected till September 2019, it said, adding that the exit penalties will only partially offset the revenue loss and the impact of tenancy losses will spill over to FY20 as well.

The reduction in operators and concentration of the market in the three companies will also put pressure on rent revenue per tower as the number of tenants per tower would go down.

The telecom sector has been battered by falling tariffs, eroding profitability, and towering debt, in the face of stiff competition triggered by disruptive offerings of Reliance Jio.

The relentless tariff war that ensued after Jio's entry into the telecom sector with free voice calls and SMS, bundled with cheap data has led to pressure on margins of even private operators that have scrambled to match the competition.

Last year, the merger Vodafone and Idea created the country’s biggest telecom operator and the behemoth -- Vodafone Idea Limited -- dislodging Bharti Airtel. Experts had said that the sector would let go over 60,000 employees by the end of FY19 as a result of consolidation. Job losses were expected in two segments -- customer support and financial functions.

Concerned at the job losses in the telecom sector, the government had begun helping the affected employees get alternative employment, and retrain and redeploy them.

In September 2018, the cabinet had approved the new telecom policy, which aimed to attract $100 billion investment and create 4 million jobs in the sector by 2022. The policy seeks to provide broadband access to all with 50 megabit per second speed, 5G services and create 40 lakh new jobs by 2022.

The telecom industry is expected to create over 10 million employment opportunities in the next five years, as per the skill development body for the sector. "There are 4 million people employed in the telecom sector and by the end of five years, 14.3 million people will be employed in telecom as well as telecom manufacturing," Telecom Sector Skill Council (TSSC) CEO S P Kochhar had said in March 2018.

With PTI inputs