Aircel, the sixth largest telecom operator on Wednesday filed for the Bankruptcy in the National Companies Law Tribunal (NCLT) in Mumbai because of increasing competition in the telecom industry and high levels of debt.
After the entry of Mukesh Ambani led Reliance Jio in September 2016, this is the fourth telecom operator to wind up their business. Along with Aircel, Telenor had also transferred its assets to Airtel with the minimum cost, and Tata Teleservices is also in the same row.
Aircel said, “Intense competition following the disruptive entry of a new player, legal and regulatory challenges, high level of unsustainable debt and increased losses had together caused significant negative business and reputational impact on the company”.
Not the outside players are affected by the Mukesh Ambani smart business strategies, but his younger brother is also facing the same situation with a debt of Rs 42,000 crore and is in the way to set up wireless infrastructure assets with Jio.
Aircel lapsed in September 2017 irrespective of their continuous efforts to merge wireless business with other competitors.
The debt-ridden company said, “Post detailed discussions with the financial lenders and shareholders, the company could not reach consensus with respect to restructuring of its debt and funding. Despite these discussions and the invoking of a strategic Debt Restructuring schemes in January 2018…. No agreement could be reached”.
Aircel is currently facing the debt of 15,500 crore debt. It has a business of 85 Million subscribers in the regions including Madhya Pradesh, Himachal Pradesh, Haryana, Gujarat, Maharashtra and Uttar Pradesh.
With the news of the loss, the subscribers proceed with the portability of their mobile number but faced difficulties in doing so.
The Telecom Regulatory Authority of India (TRAI) issue guidelines to the Aircel asking for the extra time to keep service quality in check and customer time to opt for another networks.