Job cut at Aircel, Reliance Communications and Tata Teleservices

Job in telecom sector

Three loss making telecom operators — Aircel, Reliance Communications and Tata Teleservices are likely to cut jobs due to uncertain market conditions.

India market conditions

According to TRAI statistics, Indian telecom operators reported 2.58 percent quarterly drop and 25.49 percent annual dip in their adjusted gross revenue (AGR) to Rs 39,778 crore in the June quarter of 2017.

The competitive voice and data offerings from Reliance Jio forced Aircel, Tata Teleservices and Reliance Communications to manage business less profits. Monthly Average Revenue per User (ARPU) for access services based on AGR declined from Rs 89.34 in March quarter to Rs 83.41 in June quarter of 2017.

Tata Teleservices posted 7.73 percent drop in AGR to Rs 1732.26 crore in June quarter.

Reliance Communications reported 2.06 percent quarterly increase in AGR to Rs 748.08 crore during the June quarter.

Aircel recorded 4.62 percent quarter on quarter increase in AGR to Rs 1423.58 crore.
India ARPU nosedives
Job cut

Aircel, Reliance Communications and Tata Teleservices employ about 15,000 people, according to a report in Hindu BusinessLine.

Reliance Communications on Sunday announced its decision to call off its merger discussions with Aircel to reduce its debt. Reliance Communications is opting for spectrum trading / sharing deal to sustain in the telecom business. Reliance Communications is offering stake to financial institutions to manage the debt crisis.

Tata Teleservices is closing down some of its telecom operations due to climbing losses, Business Standard reported. Tata Teleservices, which do not have a 4G business, is losing subscribers across India.

Both Aircel and Reliance Communications reduced their staff to make the organization ready for the merger. 2,000-3,000 employees will be affected. “But, now, with the merger not happening, the entire workforce could be left in the lurch as the operators themselves figure out what to do,” said an executive of one of the telecom companies.

Reliance Communications could shut down all mobile operations related to its loss-making 2G and 3G operations as part of its strategy to focus on 4G.

Aircel has not defaulted on loan repayment. India’s CBI is investigating Aircel’s Malaysian promoters for a 2005 deal. In the wake of the CBI investigation, Aircel will not be able to find a buyer in India. Aircel earlier held talks with several telecom operators.

The Business Standard report said Tata Sons Chairman N Chandrasekaran will be taking a final decision on the closure of Tata Teleservices this month.

PN Sudarshan, partner at Deloitte India, said recently: “As the fastest growing and second largest telecom market, India represents a strong destination for investment. Telecom is redefining mobility, work, governance, etc. and will promote geographical, financial and social inclusion and enable the interplay of technologies and industries for exponential growth propelling India towards a $5 trillion economy.”

The closure of Tata Teleservices and the unviable business of Aircel and Reliance Communications indicate that three operators will survive in India: Airtel, Idea-Vodafone and Reliance Jio. BSNL is the government-owned operator.