Shrinking revenues, falling profits and widening losses are just the most ominous signs for any industry. But that's precisely what is happening in our telecom industry at this point and time, and that has jeopardised almost 5 lakh crore worth of loans. It is almost 7 per cent of the loans that the banking sector has given out in all. Former TRAI chairman Rahul Khullar speaks to Business Today managing editor Rajeev Dubey on the financial state of the telecom industry.

"This is the worst that the telecom industry is passing through. We had a similar problem in 2012. Between 2010 and 2017, the huge pile up of debt on the telecos balance sheets is largely because of spectrum acquisition through auctions. Now there is Rs 5 lakh crore of debt, of which, around 1.5 lakh is stressed," Khullar said.

Speaking about whether Jio accelerated the crisis in the telecom industry, the former TRAI chairman said, "The industry was in trouble even before. On the debt front, it has been in trouble since 2014. When Jio entered the market, it promised free services (as their pricing strategy). This put the huge pressure on revenues and profits during 2016-17. That free service was extended into the last quarter of 2016-17 and if we go by the data available, revenues fell by about 8-9 per cent. This resulted in the margin crashing to about 27 per cent. For any company to survive with any profit, it needs at least 35-40 per cent. In the last quarter 2016-17, Airtel had a margin of about 35-36 per cent and it was the only company booking a profit."