Tata Teleservices’ woes continued with the company reporting a Rs 3,846-crore loss in 2014-15. Tata Sons, the group holding company, infused Rs 1,025 crore on the last day of the financial year, so that Tata Teleservices could meet its financial obligations.
Tata Teleservices’ revenues increased marginally to Rs 10,944 crore from Rs 10,452 crore in 2013-14, when the Tata group pumped in Rs 2,500 crore through compulsorily convertible preference shares. In 2013-14, the company made a record loss of Rs 6,166 crore, with its net worth completely eroded. An email sent to the company seeking its comments did not elicit any response.
Tata Teleservices is one of India’s worst performing wireless telephony companies, despite being among the first launch services.
The company participated in auctions this March and won spectrum in Andhra Pradesh, Delhi and Haryana by bidding Rs 4,034 crore. Tata Teleservices has paid Rs 1,059 crore in advance to the Union government for the air waves.
Finance costs rose to Rs 2,640 crore in 2014-15 from Rs 2,512 crore in the prior year. The company’s debt rose to Rs 27,082 crore in 2014-15 from Rs 24,506 crore in 2013-14.
The Tatas are in talks to merge Tata Teleservices operations with those of Telenor in India. Once the Centre announces merger guidelines, the companies will make their plans public, according to sources. Tata Teleservices is also in the middle of a legal battle between its promoters, Tata Sons and Japan’s NTT Docomo.
Docomo has moved the London Court of Arbitration to force the Tatas to buy back its 26 per cent stake for Rs 7,200 crore. The Tatas have sought permission to buy the shares but the government did not allow the transaction, citing a bar on pre-determined valuation. Tata Teleservices lost spectrum in three circles after the Supreme Court, in February 2012, cancelled 122 licences issued in 2008-09, when A Raja was the telecom minister in the United Progressive Alliance government. The company was not allotted spectrum in the Delhi circle in spite of having paid for it.