Aircel to Explore Merger Talks With Airtel; May Launch 4G Services: Report

By December 6th, 2017 AT 11:21 AM

Debt-ridden GSM telco Aircel has initiated talks with lenders and shareholders to overcome the ongoing crisis with cash for operations that will run out by March. According to a Business Line report, Aircel is exploring a potential merger with Bharti Airtel along with an option to launch 4G services in India through spectrum-sharing partnerships.


Last week, Bharti Airtel chairman Sunil Mital told the Economic Times that his company was open to acquisition talks with Aircel.

The Maxis-owned telco may look to shut down operations only if all efforts to keep operations going fail. “A decision will have to be taken within a month or two. Until then, the operator will continue to run the network in all circles. There is no plan to shut down as of now,” one source was quoted as saying by the publication.

The source added that the company would have to take a decision in the next two months. “There is enough cash to run operations till March. After that it will be a challenge to sustain operations for its nearly 88 million subscribers and prevent job losses of its about 5,000 employees.”

Aircel, however, recently clarified that it was not shutting down operations in 14 circles as claimed by certain media reports. The telco further added that it was making efforts to build a profitable business in the country. In a statement, Aircel had said, “Media reports about Aircel as regard insolvency or shutting down operations in 14 circles is completely speculative & misleading.”

The Business Line report said that Aircel would require fresh investments by existing promoters if it plans to launch 4G services through partnerships. “The question is whether the promoters should hang on for a couple of more years and hope to get better returns as the telecom market is expected to come out of the current crisis by then. If the promoters sell out now perhaps they may not get many valuations,” the publication source added.

Aircel has earlier delayed payment of interest on its debt repayment obligations on account of its weak liquidity position, following which rating agency CARE downgraded the telco to default (D) grade. The telco has long-term bank loans of Rs. 174.79 billion or $2.7 billion, the agency said.

Aircel, majority owned by Malaysia’s Maxis Communications Bhd, is talking to its lenders for a strategic debt restructuring (SDR), various reports claimed previously.

Aircel is currently the sixth-ranked mobile carrier in the country by subscribers. Its subscriber base showed a year-on-year growth of 6% and had around 89 million users at September end. The telecom operator’s loss in 2016 calendar year doubled to Rs. 4,319 crore, as compared to a loss of Rs. 2,215 crore in previous year.

Malaysia’s Maxis Communications Bhd owns 74% stake in Aircel, which had gotten into an agreement with Reliance Communications (RCom) to combine operations, but the deal fell apart last month due to various hurdles.

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Passionately following the Indian #Telecom Industry for over a decade from Business, Consumer and a Technical perspective. My primary focus area is Consumer & Digital Experience.

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SudhakarFarazKaushikChetan Malhotrashanky Recent comment authors
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Jio is like a coma zombie unable to.provuce good coverage at most of the places even for voice and customer care worse than BSNL. Then imagine its future services !!!


TT should mention in article which spectrum of Aircel is banned by SC, or all spectrum are banned.

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