Tata Group chairman N Chandrasekaran is considering winding down Tata Teleservices, which has a consolidated debt of over Rs 34,000 crore. The decision to wind-down the mobile service business accelerated after Chandrasekaran took over from Cyrus Mistry.
Tata Teleservices, which has a consolidated debt of over Rs 34,000 crore, may soon be shut down. Tata Group chairman N Chandrasekaran is considering winding down after failed attempts to sell its mobile service business. According to the Times of India, if the business conglomerate goes ahead with the plan, it would be the first major Tata unit to be shut down in its 149-year-old history.
Earlier, there were reports of Tata Teleservices eyeing merger with R-Comm-Aircel-MTS combine, Vodafone India and Bharati Airtel.
The decision to wind-down Tata Teleservices accelerated after N Chandrasekaran took over Tata Sons from Cyrus Mistry. According to Bloomberg, Tata Teleservices’ debt is high on N Chandrasekaran’s list of urgent fixes.
Tata Teleservices is an unlisted group company of Tata Sons – India’s largest business group. The mobile service had been trying to find a new partner after its Japanese partner NTT DoCoMo exited equity shareholding in Tata Teleservices in March 2014, after a continuous fall in the value of its 26 per cent stake in the Indian telecom services operator. Tata sons reportedly agreed to pay the close to Rs 109 crore to DoCoMo for the damages. Total debt for 25 of Tata’s listed companies had swelled to Rs 242 lakh crore rupees as of March 2017.
In May this year, reeling under the pressure of immense competition from the giant Reliance Jio, Tata Teleservices laid off 500-600 people. The total income of Tata Teleservices in April-June period declined by about 26 per cent to Rs 554.15 crore from Rs 745.4 crore in the same period a year ago. Its unit operating in the state of Maharashtra, also reported widening of its loss to Rs 506 crore in the first quarter ended June 30, hit by fall in revenue and over two-fold jump in finance cost. The company had registered a loss of Rs 127.45 crore in the same period a year ago.