Latest Comments

    i support ericsson as rcom can dupe anyone , they had... Sunday, 14 October 2018
  • Bud Biswas More
    Our company, Polaris Networks, has helped other smaller... Friday, 12 October 2018
  • Developing Telecoms More
    That is correct - it is the coastline of Equatorial Guinea,... Friday, 12 October 2018
  • Xavier Muñoz More
    This photo is not from São Tomé e Príncipe Thursday, 04 October 2018
  • More
    My name is Adewale. I am a Healthcare Manager in... Friday, 21 September 2018

Aircel may be forced to shut down Indian operations

Aircel may be forced to shut down Indian operations

Indian operator Aircel may have no other option but to shutter its operations following the collapse of its merger with Reliance Communications (RCom).

The operator has debts of around US$3.7B and continues to make losses. It holds no 4G spectrum, and the country’s apex court has issued an order to prevent it selling any of its 2G or 3G spectrum before representatives from its parent firm Maxis appear in court.

The Maxis representatives in question - promoter T Ananda Krishnan and former executive Ralph Marshall – controlled the Malaysian company when it acquired Aircel. The fact that neither has yet appeared before India’s Supreme Court was a key factor behind the collapse of Aircel’s merger with RCom.

Aircel may now attempt to shift some of its wireless assets – along with its 89 million subscribers - to a larger operator. It also has 40,000 towers that it will likely try to sell. However, this could change if the Supreme Court grants Aircel permission to sell any of its spectrum.

Filing for bankruptcy will be an unappealing option for Aircel as it would rely on bank guarantees from Maxis, and this would likely instigate a lengthy legal process. The operator is attempting to restructure its debt while streamlining its operations to focus on its strongest areas, including Tamil Nadu, the Northeast and Jammu & Kashmir.

Industry observers were blunt about Aircel’s options, with former Bharti Airtel chief executive Sanjay Kapoor saying: “there is no point in staying if you are losing more money and relevance in the market. Its only option is to sell its customers and revenue to one of the incumbents and offset its debt.”

Bharti Airtel has been cited as a likely buyer for Aircel as it is looking to strengthen its footprint in order to compete effectively with the entity that will result from Vodafone and Idea’s merger, as well as a fast-growing Reliance Jio Infocomm. Vodafone-Idea could potentially buy Aircel but are currently occupied with combining their operations.

“Airtel has demonstrated the biggest appetite to consolidate market share by acquiring marginal players. However, given their moves, their appetite for more at a higher value may not exist. Given that Idea-Vodafone combined have to play a catch-up game on 4G, versus Jio and Airtel, their ability to accord greater value to Aircel cannot be ruled out,” added Kapoor. 

Comments powered by CComment