Tata Teleservices begins winding up in J&K, north-east
NEW DELHI, Nov 21, 2012 (Mint - McClatchy-Tribune Information Services via COMTEX) --
Tata Teleservices Ltd has begun winding up operations in the Jammu and Kashmir, north-east and Assam telecom areas, after deciding against participating in the auction for radio spectrum in the 800Mhz band.
"They have stopped selling any SIM (subscriber identity module) cards in those circles," a department of telecommunications (DoT) official said, requesting anonymity. "They have informed that the services will stand terminated as of 18 January."
A Tata Teleservices spokesperson confirmed the development.
"The current reserve prices of CDMA (code division multiple access) spectrum did not support the business cases in these circles and, hence, the company decided not to pursue acquiring spectrum in the auction," a company spokesperson said in emailed reply. "These circles are not significantly large contributors to Tata Teleservices' overall operations."
The telecom firm has 320,000 customers in these areas, including 130,000 in Assam and 113,000 in Jammu and Kashmir.
The company lost its CDMA licences in these areas due to the 2 February Supreme Court order cancelling 122 telecom licences and spectrum allocated to nine companies.
The court had said that the airwaves should be re-auctioned by the government, and that all the companies that lost their permits had till 18 January to find a way to continue offering telecom services or wind up.
Tata Teleservices initially applied to participate in the auction for spectrum in the 800Mhz band in these areas to get its permits back, but withdrew its applications on 5 November.
Videocon, too, withdrew its applications to participate in the auction in some circles, leading to the auction getting cancelled.
"It was inevitable, given that the revenue of that circle was probably far less than Rs.3 crore per quarter," said a Mumbai-based analyst with a multinational investment bank, requesting anonymity. "The three circles are in geographically difficult areas, which means the investment would have been high also."
Tata Teleservices' 170 employees in the affected areas have been given three-months notices and also the option to apply for vacancies in other areas of the company, the spokesperson said.
The firm is also looking into how it can help its customers in the affected circles port to other operators, the spokesperson said.
"Tata Teleservices has begun to take the necessary measures with respect to its employees, customers and business partners in these circles," the spokesperson said. "Announcements regarding specific steps being taken will be made in due course."
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