Tata Docomo: India’s conglomerate Tata Group is getting prepared to close its telecom business and is expected to make an announcement later this month, as per the reports of Business Standard. If it happens, this will be the first major Tata unit to shut down in its history of 149 years.
The senior executives at the Mumbai-based Tata Teleservices, which operate wireline, wireless and broadband services, have already been told about the possible closure. There are reports that the company is hinting the subscribers to migrate to the other service providers through the Mobile Number Portability.
It is after the arrival of Reliance Jio, a lot has changed in the Indian telecom market. Many of the major brands have either changed the pace of the game or slowed down abd bowed out of the markets. Airtel has doubled its efforts to outrun Jio and is working towards launching 5G services and as well as 4G VoLTE services. There are a few mergers that are planning to happen, like Aircel with Reliance Communications, Vodafone with Idea. But Tata Docomo wasn’t part of any such alliance mergers.
This decision is happening after the failed attempts to sell their telecom business to big players like Vodafone and Bharati Airtel. Tata entered into the telecom business about a decade ago and then became a leader in the CDMA technology, but later failed to garner enough market share in the Indian mobile phone users.
In the year 2009, Tata entered into a joint venture with Japan’s NTT DoCoMo for 2.7 billion USD. And then in April 2014, DoCoMo had decided to sell its entire 26.5% share in Tata Teleservices and the latter had to shell out its $1.7 billion USD.
The major challenge for the Tatas will be the future of its 5,000-plus employees. Tata Teleservices is looking for the options to place the Tata Teleservices’ employees in the other businesses once a shutdown happens, but a layoff cannot be ruled out.
The other issues that need to be sorted out are spectrum sale, technical tie-ups, foreign partners, real estate, consumers, and offices. The group is believed to be in talks with Department of Telecommunications and the Telecom Regulatory Authority of India to clear some of these issues.