Business

Aircel Goes Bankrupt, Due To Rising Competition And High Debts

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| March 1 , 2018 , 12:50 IST

Aircel, the country's sixth largest telecommunications operator, along with its units, Aircel Cellular and Dishnet Wireless, filed for bankruptcy at the National Company Law Court (NCLT) in Mumbai on Wednesday due to strong competition and high levels of debt.

Aircel is the fourth telecommunications company that closes after billionaire Mukesh Ambani debuted Reliance Jio in September 2016, sparking a disruptive price war in the industry with its free voice calls and cheap internet access.

"Intense competition following the disruptive entry of a new player, legal and regulatory challenges, high level of unsustainable debt and increased losses had together caused significant negative business and reputational impact on the company," Aircel said in a statement.

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"Post detailed discussions with the financial lenders and shareholders, the company could not reach consensus with respect to the restructuring of its debt and funding. Despite these discussions and the invoking of a Strategic Debt Restructuring scheme in January 2018, no agreement could be reached," the statement further added.

Aircel has contacted the regulator to extend the validity of additional port out codes to allow subscribers to move to other networks without changing their number. On the same, TRAI is likely to give Aircel additional exit codes with an extended validity of 45 days instead of 15 days to ensure the convenience of the subscribers.