Mumbai sources have reported that the shakeout in mobile telecom continued as the Tata Group quit the highly competitive sector after nearly 15 years, merging its loss-making consumer mobile business, consisting of Tata Tele services Ltd and Tata Tele services Maharashtra Ltd, with Bharti Airtel. Meanwhile the struggling venture is saddled with debt of over Rs.40,000 crore, but the Tatas will clear past liabilities and dues as part of the deal.
Moreover it highlights the rapid consolidation in the sector after the aggressive launch of services by Mukesh Ambani's Reliance Jio in September last year. Furthermore it follows on the heels of Vodafone and Idea the second and third largest telecom companies respectively agreeing to merge to become No. 1 with a combined subscriber base of over 400 million, overtaking Airtel.
Furthermore Tata Group is now in the initial stages of exploring a
combination of its enterprise business with Tata Communications and its retail
fixed line and broadband business with Tata Sky. Presently Tata Group had
previously also explored option of shutting down the unit. However, it finally
found it best to find a nest for the business rather than closing it down as
the latter has huge ramifications on business ecosystem.
