Aircel, the Maxis-owned Indian telco, has filed for bankruptcy protection after failing to replay a debt of about 155 billion Indian rupees ($2.4 billion).
With a market share in India of about 7.3% at the end of December, Aircel had been courting interest in its assets over the last few months, but had not been able to find a buyer.
Media reports say Aircel Ltd. has been in talks with rival operators Bharti Airtel Ltd. (Mumbai: BHARTIARTL) and Reliance Jio about roaming agreements in various circles (service areas). Yet merging players Idea Cellular Ltd. and Vodafone India have stopped receiving calls from Aircel's network.
"Should the application [to India's National Company Law Tribunal] be accepted, then the committee of creditors and the resolution professional (RP) will work out a strategy and funding plan for the company in a time-bound manner," said a letter issued to the employees of Aircel after its filing. "The Board believes that, through this process, the company reemerges … as a stronger and more viable business."
The writing was on the wall for Aircel once merger talks with Reliance Communications Ltd. lapsed in September 2017. It lost about 3.5 million subscribers in January this year, and has also suffered many network outages in February, forcing subscribers to jump ship. Aircel is also believed to be in negotiations with vendors to ensure its customers can still make use of network services.
Aircel is one of several smaller operators that have struggled to survive in the intensely competitive Indian market following RJio's aggressive service launch in late 2016. Several mergers and acquisitions took place last year, with the average number of telcos per circle falling from between 12 and 14 to just three or four.
Employee representatives for Aircel, which has about 5,000 workers on its books, have written to the prime minister's office, urging authorities not to overlook their interests. Recent consolidation in India is thought to have claimed about 100,000 jobs in total.
— Gagandeep Kaur, contributing editor, Light Reading