Telecom company Aircel will shortly file for bankruptcy at the National Company Law Tribunal (NCLT) and its board has been dissolved ahead of the move, said two people aware of the matter. That will mark the demise of the last small mobile phone company, leaving just four main non-state ones —soon to be three after a merger.
The decision was precipitated by the Reserve Bank of India scrapping all debt revamp schemes in favour of the Insolvency and Bankruptcy Code and seeking to hasten resolution.
Aircel CEO Kaizad Heerjee reportedly wrote to employees in an email earlier this week that the company has had no funding for a while and has been dependent from current business operations. However, the company’s revenue and profitability have been hurt, much like other incumbents in the space, post the launch of Reliance Jio and the company expects the scenario to only become more difficult in the coming days.
Aircel network reportedly collapsed as people started pulling out of the network. Last week, nearly nine lakh Aircel customers across India decided to port their numbers to other telecom service provider due to frequent call drops, amidst reports that the telecom company is facing financial difficulties.
The network was badly hit as porting requests rose exponentially. Some of the customers said they were neither able to make a call nor receive and they termed it as the first step towards total closure of services.