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S Tel winds down operations

BS Reporters  |  New Delhi 

S Tel, the telecom company own-ed by non-resident Indian C Sivasankaran, has decided to wind down operations in all the six circles where it won licences in 2008. The Chennai-based telco says it has decided to follow the Supreme Court order that cancelled 122 telecom licences and gave operators four months to shut operations. With around 3.5 million subscribers, S Tel operates in the Bihar, Orissa, Jammu & Kashmir, Himachal Pradesh, the Northeast and Assam circles. It has a market share of only 0.4 per cent.

Speaking to Business Standard, C Sivasankaran said: “We are following the Supreme Court order and helping out our customers to port out.”

Asked whether the company would bid in the spectrum auction, Sivasankaran said: “We surely will, depending on the terms and conditions of the auctions.” Asked what the company would do with the 3G spectrum it won in the three circles of Bihar, Orissa and Himachal Pradesh for Rs 337 crore, Sivasankaran said: “We would like to return the spectrum to the government but it will depend on the terms and conditions.”

A company statement said: “Our infrastructure and media vendors have intensified the disconnection of services, since the passing of the judgment by the Supreme Court, considering that there is now no chance of banks disbursing funds. S Tel has been ascertaining with its advisors the steps that could be taken to address the customer pain arising out of such a force majeure kind of effect created by the unfolding scenario.”

The statement added S Tel had already reached out to its subscribers, and its channel partners vide an SMS campaign and information posted on its website. In addition, it issued a press statement after the judgment, asking subscribers to switch operators if they deemed fit.

S Tel is the first company to have decided to port out its customers. Days after the judgment, Bahrain’s Batelco group, which owned 42.7 per cent stake in the company, decided to move out due to uncertainties in the Indian telecom sector.

First Published: Wed, February 22 2012. 00:04 IST