Indian telecom service provider Bharti Airtel has pulled out of the Rs 700 crore deal to buy Loop Mobile as the initiative did not receive regulatory approvals.

The Department of Telecommunications (DoT) had raised objections to the deal because Loop did not give a direct option to its mobile subscribers in Mumbai to move to their choice of telecom service providers such as Vodafone, Idea Cellular or Reliance Communications.

If Loop customers had an option to choose Mobile Number Portability, the government could have made a small money on every transfer. Since Loop, owned by Khaitan family of Dubai, has decided to sell the business during distress business conditions, its customers were forced to move to Airtel.

Loop Mobile India Chief Operating Officer Surya Mahadevan said the decision by Airtel to drop out of the proposed transaction caused huge loss to the company.

In February 2014, the Sunil Mittal promoted Bharti Airtel announced the acquisition of Loop Mobile, excluding employees, to strengthen its presence in the metro. At the time of the deal, Loop Mobile had about 3.2 million mobile users on a Home Location Register (database of permanent subscriber information) basis and about 1.5 million on a visitor location register (VLR) basis.

Loop Mobile has applied for additional porting codes to port out its subscribers. The GSM operator’s telecom license will expire on November 29. To avoid inconvenience to customers, Loop is working towards smooth transition of all its existing subscribers. A number of customers have already started migrating to rivals due to regulatory concerns.

Earlier Hindu Business Line reported that Mumbai’s oldest mobile phone operator also closed down nearly half its outlets in the city, while 50 per cent of its employees have left the company.

The GSM operator has about 15 company-owned and operated stores in the city against 27 outlets during the start of the year.

At present, its headcount is somewhere in the region of 180, much lower than the 350 permanent staff at the time of the deal.

Loop faced disconnections from other operators for non-payment of interconnect usage charges. MTNL and Vodafone India barred voice calls, while MTNL, Idea Cellular and Vodafone India have barred text messages.

Baburajan K
[email protected]