Tata Sons Reduces its Entire Investment of Rs 28,651 Crore in Loss-Making Tata Teleservices

Follow Us

Tata group holding company Tata Sons has written off its entire investment of Rs 28,651.69 crore in loss-making telecom arm Tata Teleservices, according to a regulatory filing. Tata Sons are in the process of transferring the consumer mobile business of Tata Teleservices to Bharti Airtel and hiving off the enterprise segment to merge with the group's networking arm Tata Communications. "The company has considered it appropriate to write off the entire investment of Rs 28,651.69 crore in Tata Teleservices Limited," Tata Sons said in a filing.

tata-sons-investment-teleservices




The effect of impairment was reflected on Tata Sons' consolidated net profit which dropped to Rs 4,379 crore at the end of 2017-18 from Rs 18,432 crore in 2016-17. On a standalone basis, the net profit of Tata Sons increased by 6% to Rs 873 crore in 2017-18 from Rs 824 crore in 2016-17.

According to the filing, Tata Teleservices recorded an impairment loss of Rs 16,891.28 crore, including Rs 1,265.81 crore pertaining to the prior period, on the consumer mobile business assets based on an assessment of its recoverable value.

Tata Sons have also made a provision for claims of Rs 4,393.45 crore for the year ended March 31, 2018, after considering various factors " including the without prejudice discussions with the relevant counterparties". The filing said that a subsidiary company had evaluated the recoverable value of spectrum that Tata Teleservices acquired in March 2015 and recorded an impairment loss of Rs 905.41 crore around the same.

Taking the factors at Tata Teleservices into account, Tata Sons said that "the company considered inappropriate to write off the entire investment of Rs 28,651.69 crore in the subsidiary company in its standalone financial statements," reported PTI. Tata Teleservices suffered a jolt after its three licences were cancelled by the Supreme Court in 2012 for irregularities in spectrum allocation to the company and several other new entrants.

Following the development, Tata Teleservices ran into a tussle with its partner NTT Docomo which decided to withdraw its investment in the telecom firm. Tata Teleservices became subsidiary of Tata Sons from an associate firm with effect from February 2017 after its arrangement with NTT Docomo ceased.

The heavy tariff war triggered by the entry of Reliance Jio in 2016 led to Tata Sons signing a pact with Bharti Airtel to hive off consumer mobile business of Tata Teleservices without any debt transfer to the Sunil Bharti Mittal-led firm.

Reported By

Managing Editor

Chakri is a go-to guy for your next smartphone recommendation. Back in his engineering days, he used to play with smartphones by installing custom ROMs and that passion got him into the tech industry. He still goes nuts about a smartphone knocking his door for review. Currently managing everything at Telecom Talk, Chakri is trying to master PUBG Mobile in his free time.

Recent Comments

TheAndroidFreak :

Off Topic: Realme GT 7 Pro Global unit

OnePlus 13 and Xiaomi 15 to Feature Qualcomm Snapdragon 8…

TheAndroidFreak :

I don't know why people get such experience on Vi. Realme GT 6 was used in my whole trip. I…

OnePlus 13 and Xiaomi 15 to Feature Qualcomm Snapdragon 8…

TheAndroidFreak :

One Plus 13 also clocking 2Gbps in EU region. I don't know why. One Plus 12 clocked max 1.2-1.4Gbps with…

OnePlus 13 and Xiaomi 15 to Feature Qualcomm Snapdragon 8…

TheAndroidFreak :

Better get back your hopes to iQOO Neo 10 Pro which will cost 42-43K for 512GB this time without discounts.…

OnePlus 13 and Xiaomi 15 to Feature Qualcomm Snapdragon 8…

Load More
Subscribe
Notify of
6 Comments
newest
oldest most voted
Inline Feedbacks
View all comments