The Tatas are among the prodigious titans and tycoons of India’s business milieu, and undoubtedly India’s biggest conglomerate that has a global footprint in around 100 countries spanning six continents. Their unabashed performance since decades has achieved brilliant milestones, provided employment to millions in India and abroad, and their cutting-edge innovation with sustainability is unparalleled to this date. However, the largest business group known for its excellent corporate governance was shrouded with controversies as the CEO Cyrus Mistry was dismissed from his position, amidst hues and cries over legal hassles. Tata Sons have apparently decided to go private, most specifically to restrict Cyrus Mistry’s large shareholding in the group. The Shapoorji Pallonji group still has 18.5 percent holdings in the Tata group.
Tata Group has also recently informed that it has planned to shut down its wireless business Tata Teleservices, which is their telecom group. The Chief Financial Officer of Tata group, Saurabh Agarwal and Managing Director of Tata Teleservices has already met the officials of Department of Telecommunications (DoT). They seemed to have discussed methods of surrendering their existing spectrum holdings. Some of those holdings have been bought over the last few years through spectrum sales.
Meanwhile, they have to intimate other departments too about their decision and procedures to terminate the business and write off the losses. The complete process would take 60 days from the day they begin. Tata Teleservices have operation in 19 circles in India. In its history of 149 years of establishment, this is the first subsidiary about to get shut, and hence the decision is quite unprecedented.
Tata Teleservices was established in 1996, and began with landline operations. CDMA options were launched in 2002, and GSM in 2008. It received investment worth 14,000 crore from NTT Docomo that eventually quit the business in 2014. Insiders have revealed that the spectrum they surrender would receive no refunds. According to the telecom regulator their market share of wireless customers is 3.5% and the company has been running under debt of Rs 30,000 crores. The highest decision-making board has decided against pumping in money to the loss-making venture anymore. Unsuccessful attempts were made to sell the business as well.
Furthermore, the telecom was under constant pressure for better services from the subscribers for greater investment in operations that would confront the blithering competition from Reliance Jio Infocomm. As further investment options remain infeasible, the decision to shut down the business has been finalised.
Article by Mausam