Ta-Ta to Tata? TTSL mulling closure

15 Sep 2017

Tata Group chairman Natarajan Chandrasekaran is evaluating winding down the conglomerate’s Indian wireless service provider arm, Tata Teleservices (TTSL), the Economic Times reports, citing sources directly aware of the matter. The shutdown of TTSL would be the first major Tata unit to be closed down in the group’s 149-year history. The development follows a failed attempt to sell the debt-ridden company, after market leader Bharti Airtel backed out of talks regarding a potential tie-up. A comparatively small player in the Indian mobile market – TTSL served just under 44 million subscribers at the end of June 2017, representing around 3.7% of the total market – TTSL has struggled financially in recent years, with the operator noting in its most recent annual report that it had incurred a net loss of INR46 billion (USD716 million) in the twelve months to 31 March 2017, and had accumulated losses of more than INR303 billion, which had ‘fully eroded its net worth.’ Earlier this year, the operator drew a line under its long-standing legal dispute with its Japanese partner DOCOMO, when it was granted approval to pay a USD1.2 billion arbitration award regarding DOCOMO’s exit from the joint venture. Tata is currently examining ‘all options’ for the mobile unit, a spokesperson for the group was quoted as saying, including selling off spectrum to reduce its debt. According to one source, however, the most viable option would be to wind down the operation, which would first require lenders to agree to a loan recast programme.

As previously reported by TeleGeography’s CommsUpdate, Tata Sons (the group’s main holding company) had previously considered filing for bankruptcy for TTSL, but had decided against the move due to the impact it would have on other Tata companies and opted instead to push for a merger or takeover.

India, NTT DOCOMO, Tata Teleservices (TTSL, incl. TTML, Tata Tele Broadband)