Aircel, one of the last remaining smaller telecom companies operating in India, filed for bankruptcy on Wednesday after it was unable to fight the ongoing aggressive price war and failing to reach an accord with its lenders.
“The board of directors acknowledged that it has been facing troubled times in a highly financially stressed industry, owing to intense competition following the disruptive entry of a new player, legal and regulatory challenges, high level of unsustainable debt and increased losses. This has caused significant negative business and reputational impact on the company,” Aircel, owned by Malaysia’s Maxis, said in a statement.
As per Reserve Bank of India guidelines, Aircel invoked a Strategic Debt Restructuring (SDR) scheme in January 2018, but no agreement could be reached with the lenders with respect to restructuring of its debt and funding.
The company would like to communicate to all the customers that it would strive hard to provide uninterrupted service connectivity to them and appeals to them for their support during the current difficult period, the statement said.
However, Aircel services are disrupted as telcos like Idea Cellular and Vodafone have stopped interconnect services to the debt laden firm for non-payment of dues.
Mukesh Ambani-owned Reliance Industries made an aggressive entry with Jio in 2016, promising free voice calls for life and 4G data at low prices. This forced incumbents like Airtel, Vodafone, Idea and others to follow suit and offer attractive packages.
Aircel has over 85 million subscribers across 17 telecom circles, according to TRAI data.