India’s Tata Group looks to disconnect its telecom unit
After numerous attempts to revive and later sell off Tata Teleservices, Tata Sons Chairman N Chandrasekaran is mulling to wind it down
After numerous attempts to revive and later sell off its beleaguered mobile services business, India’s US$ 110 billion conglomerate Tata Group is mulling to wind down Tata Teleservices.
Tata Sons Chairman N Chandrasekaran is reportedly evaluating the option and if this goes through, it will be the first major Tata unit to be closed down in its 149-year-old history, reports Times of India.
Tata Teleservices has a consolidated debt of Rs 340 billion (US$ 5.30 billion) and if it is suspended, the lenders may also have to take a haircut. However, the closing down of Tata Tele will happen only after lenders agree to a loan recast program. The company has reportedly approached the lenders’ consortium for the same, the daily added.
Tata Tele has around 45 million subscribers with about 4% share of the Indian mobile telephony market. Ever since its inception, the company could never garner much market share and always remained an also- ran player in all the telecom circles in India.
It entered into a joint venture with Japan’s NTT DoCoMo in 2009 for US $2.7 billion. Later in April 2014, DoCoMo decided to sell its entire 26.5% stake in Tata Teleservices and the latter had to shell out US$ 1.17 billion.
Tatas made many unsuccessful attempts to sell Tata Tele. The latest deal-making it had was with India’s leading telecom services provider Bharti Airtel.
Earlier during the tenure of former Tata Sons chairman Cyrus Mistry, the company had held discussions with India’s second largest telecom services provider Vodafone, but it fell through over valuation differences.