New Delhi, Feb 28: The last standing fringe operator Aircel, along with its units, has filed for bankruptcy in the National Companies Law Tribunal (NCLT)-Mumbai on Wednesday. This last resort was taken when the Malaysian owned Maxis company failed to strike a truce with its lenders and shareholders.
It was earlier reported that the Rs 15,500 crore debt laden telecom operator will be filing for bankruptcy.
The parent under businessman Ananda Krishnan’s call to pull the plug on further fund infusion added to its woes. Aircel shutting down will impact tower firms, vendors, distributors and 500 employees associated with the operator.
Then there are license fees, taxes, and interest payments. Idea Cellular ?has snapped its ties with the operator for unpaid dues of Rs 60 crore and Vodafone is expected to follow suit. GTL and ATC have taken Aircel to courts to recover their dues.
The telco had recently shut its services in 6 circles to ficus on its better performing ones – is the fourth company to go under after Reliance Jio Infocomm launched services in September 2016, undercutting prices in the telecom sector and nearly halving revenue realizations for the industry. Norway-based Telenor is ?transfering its assets to Airtel for almost no charge, as also the wireless business of Tata Teleservices. Reliance Communications was forced shut and its wireless assets are being bought by Jio.
End of an ambition
Krishnan entered India’s phone market, the world’s second largest by users, in 2005 by buying a majority stake of Aircel for about $1 billion and spent billions more trying to build the business. In 2011, it was one of the two operators to launch Apple’s iPhone 4 in India. But the appeal of having more customers than the populations of various countries lured so many companies that India morphed into one of the world’s most crowded phone markets — at one point having a dozen players. Carriers charged some of the lowest phone rates in the world, resulting in smaller operators to either merge or get out. Competition intensified in 2016, when India’s richest man stormed into the market with free calls.