Malaysian-owned cellco Aircel is planning to close down services in six of its least profitable service areas and will return its 2G spectrum for those circles to the government, the Economic Times reports, citing people familiar with the matter. According to the unnamed sources, the cellco expects to boost operating profit to INR12 billion (USD186 million) per year by winding up its mobile business in the following six circles: Uttar Pradesh West, Haryana, Gujarat, Madhya Pradesh, Himachal Pradesh and Maharashtra. Cutting back its footprint to focus on its most profitable areas would enable the operator to ‘ride out the wave of low rates for 18 to 24 months’ a person familiar with the company’s plans was quoted as saying, adding that the recent price war has driven down its monthly ARPU to less than INR100 from around INR130 to INR140 prior to the launch of Reliance Jio Infocomm (Jio) in September 2016.
The cellco had previously been gearing up for a merger with Reliance Communications (RCOM), but prolonged delays in securing permission for the tie-up led to the collapse of the agreement last month.
The unnamed sources also noted that the telco is currently in talks with potential buyers regarding a sellout, although the parties involved were not named. As previously reported by TeleGeography’s CommsUpdate, the chairman of market leader Bharti Airtel, Sunil Mittal, said that the company would be open to acquisition talks with Aircel, suggesting that the beleaguered cellco’s only options for buyers were Airtel or the merged Vodafone India/Idea Cellular.