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N Chandrasekaran looks to cut off Tata Tele Connection & this move will be a first in the group’s 149-year-old history

N Chandrasekaran looks to cut off Tata Tele Connection & this move will be a first in the group's 149-year-old history

 

 

Tata-Teleservices_1Tata Group chairman N Chandrasekaran is evaluating the option of winding down the mobile services business, Tata Teleservices (Tata Tele), after attempts to sell the beleaguered unit failed, people directly aware of the matter said. If the group goes ahead with its plan, it will be the first major Tata unit to be closed down in its 149-year-old history.

Tata Tele has been through some unsuccessful deal making in recent times, the latest discussions being with Bharti Airtel and even an exploratory talk with Reliance Jio. The telecom services provider has been searching for a new home after Japanese partner DoCoMo, which owns 26%, decided to pull the plug three years ago.

If the telecom operations are suspended, the conglomerate will have to take a hit on its balance sheet as Tata Tele has a consolidated debt of over Rs 34,000 crore. Even lenders to Tata Tele may have to take a haircut, perhaps the first time where they may have to take a knock on their exposure to a Tata entity, sources added. Tata Tele has around 45 million subscribers with about 4% share of the Indian mobile telephony market. Disposing of its telecom spectrum could, however, lessen its total debt. “As far as Tata Teleservices is concerned, the group is examining all options at this point in time,” said a Tata Sons spokesperson.

 

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