The financial situation is also causing network and system outages, impacting millions of customers, especially in its biggest circle Tamil Nadu.

Aircel warns employees of difficult times ahead amidst severe cash crunchImage source: kurumban via Flickr
news Telecom Thursday, February 22, 2018 - 12:31

India’s smallest private telecom operator Aircel is facing the brunt of intense competition in the Indian telecom industry as it considers filing for bankruptcy. According to a report in Economic Times, the company has warned its 5000+ employees to brace for ‘difficult’ times as the company faces serious funding issues.

Aircel CEO Kaizad Heerjee reportedly wrote to employees in an email earlier this week that the company has had no funding for a while and has been dependent from current business operations. However, the company’s revenue and profitability have been hurt, much like other incumbents in the space, post the launch of Reliance Jio and the company expects the scenario to only become more difficult in the coming days.

And not just the company, its customers too have been facing severe network issues. That, accompanied by reports of a possible closure of the company has seen porting requests skyrocket.

According to a Zee Business report, some users complained that they were unable to use the mobile number porting facility due to network issues. There was a network issue across Tamil Nadu, which is the biggest circle for the company, and many users were neither able to make calls nor access the internet.

According to the CEO, the financial situation is causing network and system outages impacting millions of customers.

The company, amid severe financial crisis is looking at options for the companies and is talking to all stakeholders including lenders, on the road ahead.

Its parent company Maxis was considering a cash infusion to support the company but eventually backed out. ET reports that Aircel has been negotiating with lenders since September but has failed to find a way to recast of its Rs 15,500-crore debt. 

ET reported on Sunday that Aircel is considering filing for bankruptcy in the National Company Law Tribunal. Should the company shut down, there will be four private telecom players left, of which two – Vodafone and Idea – will soon merge.

Aircel recently stopped services in six circles and currently has 85 million customers.

Ever since Reliance Jio launched services, the company’s financials have been severely affected. From a quarterly operating profit of Rs 120 crore in July 2016, slipped to an operating loss of Rs 120 crore by December 2017.

It also had pending dues of Rs 60 crore with Idea Cellular, which snapped interconnectivity ties with it. Tower vendors too, switched off some of its base stations for non-payment of dues. Making matters worse, Reserve Bank of India circular dubbed Aircel a non-performing asset for banks, due to which the company is now battling a freeze on its bank accounts.

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