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Idea suspends interconnect services to Aircel over non-payment of dues

Idea said the services will be restored immediately after Aircel makes the payment

Romita Majumdar  |  Mumbai 

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The lenders want Aircel promoter, Malaysia-based Maxis, to invest at least $1 billion into the company so that it can meet financial obligations

Cellular has said it has suspended interconnect services to Aircel because the latter did not “pay its dues”.

“Despite several reminders for releasing the dues since November 2017, the operator has failed to meet its payment commitments, forcing to suspend interconnect services,” said in a statement.

would restore interconnect services once Aircel cleared its dues, it said.

Cellular regrets the inconvenience caused to mobile users, who are unable to connect with each other. We hope the operator will honour its contractual obligations and payment commitment, in the interests of customers,” the statement said.

Aircel, which has a debt of Rs 155 billion, has entered into a strategic debt restructuring (SDR) plan after the lenders agreed to convert its debt into equity, according to a media report last week.
telcos positions graph
telcos positions graph

“The state of the industry is bad, we are in active discussions with all our stakeholders to do the best we can under the present difficult business environment and the ongoing SDR process,” said an Aircel spokesperson in response to queries about Idea’s move.

Aircel invoked strategic debt restructuring after its proposed merger with Anil Ambani-led Reliance Communications fell through late last year. T Ananda Krishnan-led Maxis Communications, based in Malaysia, holds a 74 per cent stake in the debt-ridden company. Lenders had prodded Maxis to infuse capital into its arm but, after it failed to do so, they pushed through strategic debt restructuring.

Aircel has terminated operations in six circles — Gujarat, Maharashtra, Haryana, Himachal Pradesh, Madhya Pradesh, and Uttar Pradesh (West) — affecting almost 4 million subscribers.

The Regulatory Authority of India (TRAI) has directed Aircel to wait till March 10 for its subscribers to port out to other operators.

Aircel’s subscriber base as of November 2017 was 87.5 million and the company had a 7 per cent market share. It is expected to cut losses by focusing on its profitable circles.

Aircel, like other domestic operators, has been reeling from the blows of a price war started by Mukesh Ambani-led Reliance Jio.

While Airtel and Vodafone have deployed fresh resources despite the hit they took, has been asking operators to make peace and stabilise prices.

Idea’s proposed merger with Vodafone is likely to be completed by March this year.

In the December quarter, Jio was the only operator to post profits. It became the third-largest player by revenue share, outranking Last month, Business Standard had reported that Aircel lost about 665,916 subscribers. This is according to the November numbers published by Trai.

Aircel, however, has done better than its counterparts such as Reliance Communications, which lost 25.75 million subscribers, and smaller operators like Tata Teleservices, Telenor, and Sistema Shyam.

Larger operators, along with Jio, have continued gaining from this shift towards freebies and 4G services.

First Published: Wed, February 07 2018. 22:18 IST