Reliance Communications to shut down 2G operations, cut several jobs
What's the story
The Anil Ambani-owned Reliance Communications has reportedly decided to shut down its 2G mobile services within a month and terminate thousands of employees by 30 November.
The debt-burdened telecom operator would, however, continue its 3G and 4G mobile operations till they remain profitable.
The existing subscribers on RCom's 2G-network can reportedly upgrade to 3G or 4G network, or migrate to other operators.
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Need to call it a day: RCom Executive Director
Reliance Communications Executive Director, Gurdeep Singh, has reportedly informed the employees of the debt-ridden company that they have reached a "situation where we need to call it a day on our wireless business," and it needs to be shut down within "30 days from now".
Other Businesses
RCom fails to find buyers for its DTH business
RCom's Gurdeep Singh also told the employees that their DTH business would be closed on 21 November, after the license expires.
However, he informed them that the company would "continue to operate ILD voice, consumer voice, and 4G dongle postpaid services" and mobile towers until the time these businesses remain profitable.
Singh said Reliance Communications would be shutting down all other operations.
Merger
RCom burdened with a debt of Rs. 46,000 crore
RCom's decision to terminate its 2G services follows the cancellation of its merger with Aircel earlier in October.
The merger with Aircel was expected to bring some relief to the Anil Ambani-owned telco, which is reeling under Rs. 46,000-crore debt.
Last year, RCom and Aircel announced and inked a merger deal. However, on 1 October, RCom stated that the agreement had lapsed.
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It was mutual: RCom
Reliance Communications said, "Merger agreements with Aircel allowed to lapse by mutual consent." The reason being "inordinate delays caused by legal and regulatory uncertainties, various interventions by vested interests, policy directives impacting bank financing for telecom and changed industry dynamics," stated RCom.
Other Plans
DoT clears Shyam Sistema's merger into RCom
Though the Aircel merger was one of the opportunities for RCom to lower its massive debt, the company recently said it was considering an alternate plan to reduce its debt burden.
Such options include sharing and trading the company's spectrum (airwaves) that are valued at around Rs. 19,000cr.
Meanwhile, Department of Telecommunications gave its nod to the RCom-Shyam Sistema Teleservices (MTS India) merger.
Information
Shyam Sistema's wireless business assets will come under RCom
The Shyam Sistema merger would help RCom acquire 30MHz of the superior and valuable 800/850MHz band spectrum, ideal for 4G LTE services, enabling existing 2G subscribers to upgrade to 4G. It will also gain two-million users and additional annual revenues of around Rs. 700cr.