Hughes crisis may lead to further job loss in telecom

Around 600 odd employees at Hughes India may lose their jobs, if the crisis around Hughes India, a majority-owned subsidiary of Hughes Network Systems, carries on.

Hughes India has to pay to the department of telecommunications (DoT), Government of India (GoI), an amount of Rs 600 crore ($84 million). This is a long standing due as it has to share a portion of the revenue generated in India as AGR (adjusted gross revenue) to the DoT.

The amount it owes to GoI is more than three times its net worth in India. Inability to pay the same is pushing the Company towards bankruptcy and closure, and Hughes India will have no option but to stop its services in India.

The telecom sector in India is already going through a rough patch and thousands of jobs have been lost due to closure of existing players, mergers and acquisitions. Many more are under constant fear of losing their jobs as telecom operators are threatening closure of operations.

Vodafone Idea is sailing in the same boat, as the Company owes Rs 2800 crore ($3.9 billion) in dues, interest and penalties. It has warned the DoT that it may shut shop, putting at risk 13,000 employees, and billions of dollars in bank loans.

Hughes Network Systems is the leading provider of broadband satellite networks and services in the country. The Company is present across all key vertical markets ranging from banking, education, defense, telecom, energy and retail, addressing the connectivity needs of the various government departments. It is the largest satellite service operator in India, providing a comprehensive range of broadband networking technologies, solutions, and services for businesses and governments, including managed services, to meet every communications-related challenge. Any disruption in its services will become a large roadblock in the running of various industries in India.