Indian wireless provider Aircel has filed for bankruptcy in the National Company Law Tribunal (NCLT), after lenders and shareholders were unable to agree to a restructuring plan for the operator’s INR155 billion (USD2.37 billion) debt pile, the Economic Times reports. If the NCLT accepts the request from Aircel, an ‘interim resolution professional’ will have 270 days to find funds and buyers to repay lenders, with the company going into liquidation if this process fails. Regarding the move, Aircel said in a statement: ‘The board of directors acknowledged that it has been facing troubled times in a highly financially stressed industry owing to intense competition following the disruptive entry of a new player, legal and regulatory challenges, high level of unsustainable debt and increased losses.’
The announcement follows revelations earlier this month that Idea Cellular and Vodafone India have suspended interconnection with Aircel due to the cellco’s failure to pay dues, whilst a tower operator has also reportedly deactivated a number of the operator’s base stations for the same reason. Aircel’s situation deteriorated rapidly in the second half of 2017 after a planned three-way merger with Reliance Communications and Sistema Shyam TeleServices (SSTL) fell through.
Aircel represents the last of the nation’s smaller providers to either choose to leave or be forced out of the market. As noted by TeleGeography’s GlobalComms Database, the market was at one point crowded with 13 cellular providers, but this has been narrowed by the mass licence cancellation in 2012, rising spectrum costs and, most recently, the disruption of new arrival Reliance Jio Infocomm (Jio). Once all of the current merger and acquisitions are completed, the market will be served by just five operators – falling to four if the government chooses to unify the two state-owned providers Bharat Sanchar Nigam Limited (BSNL) and Mahanagar Telephone Nigam Limited (MTNL) – those being: Bharti Airtel, Vodafone/Idea, Jio and BSNL and MTNL. In the last year alone Telenor India and Tata Teleservices Limited (TTSL) both agreed to sell their mobile business to Airtel whilst SSTL was merged with RCOM, only for the latter RCOM to close down services. At the end of December 2017, Aircel had a subscriber base of 84.9 million and represented 7.3% of the market.