- Difficult time for Aircel's 5000+ employees. Most fear they will be left jobless
- Aircel hasn't paid lenders and service providers since September 2017. Might owe Rs 15500 crore according to reports
- Customers complain of no signal. Say can't port too
“Aircel Tamil Nadu
customers will be able to roam on BSNL network. We are in the process of
arranging a bank guarantee. Once that is finalised, Aircel customers
can get to that network. Some plans will be allowed as they are but some
may be modified. There will be no roaming charges,” said Sankara
Narayanan K, head - SBU South India for Aircel, told the Economic Times who carried the story.
BSNL, though, clarified that the deal would only be through if Aircel is able to pay for the arrangement.
This follows reports that Aircel Telecom, which has around 8.5 crore customers, could perhaps become India's fourth telecom company to halt services in the past three years, as rising costs, and risks of bankruptcy loom large over the company.
Company officials were quoted in another Economic Times report as saying that they were approaching the National Company Law Tribunal (NCLT) to file for bankruptcy proceedings.
The company has been reported to have issues with Directors resigning from the board, and a lack of funding. Kaizad Heerjee, Chief Executive Officer at Aircel, was quoted as saying that the company expects coming days to be difficult, also admitting that millions of customers have been impacted.
Since September, debts grew to a whopping Rs 15500 crore, and no lenders are willing to support Aircel or its business. The debts have been rising on account of interconnect charges, termination charges to other operators, license fees and costs on vendor fees and maintenance of network up-time. Servicing interest-payments on loans has also been a challenge for Aircel.
Revenue for quarter ending December 2017 was Rs 512 crore, in comparison to projected revenues of Rs 1435 crore every quarter. The situation has worsened. For instance, Aircel's quarterly operating profit of Rs 120 crore in July 2016, dropped to Rs 5 crore by July 2017. For December the company reported a Rs 120 crore loss on its books.
The financial mess at Aircel has led to Idea Cellular snapping its interconnection services with Aircel, and dues of Rs 60 crore have been pending for three months. Tower vendors resorted to switching base stations off for non-payment of dues, and a RBI decision on freezing Aircel's accounts, calling it an NPA has hit the company severely.
Aircel's parent company - Maxis, run by Malaysia-based billionaire T Ananda Krishnan - contemplated cash infusion, but has opted to hold back instead, according to insiders at the company. To make matters worse, Aircel's lenders and network service providers have not been made payments for the past nine months, starting September, and even existing lenders have refused to offer a restructuring or additional provisioning of loans.
Although services were stopped in six circles, the Tamil Nadu circle, the most profitable circle for Aircel has maintained healthy revenue. But even in Chennai, customers complained of patchy network and trouble in porting out from Aircel. India's sixth largest telecom company has a subscriber base of nearly 8.5 crores according to a 2015-16 TRAI (Telecommunication Regulatory Authority of India) report, and nearly 1.5 crore customers are from Tamil Nadu alone.
Although the company is yet to press bankruptcy proceedings, the unforeseen event is expected to bring inconvenience to a large number of lenders, network service providers, employees and also customers.
Rising Customer's Discomfort
Customers have already started thronging offices of Aircel after they found themselves unable to port out from Aircel. Over 12 lakh customers - 3 lakh on Tuesday and 9 lakh on Wednesday - attempted to port out to other service providers.
According to a report in The Hindu, police pickets have been placed at Aircel Offices in Tiruchi. The company executives have told customers that there has been no intimation from the top management of a shutdown, and customers have started panicking from the network issues.
The Hindu Business Line reports that more than 5000 Aircel employees have themselves applied to port their numbers, but failed to do so.
These employees are worried about their jobs too.
"We have read media reports (about a letter from the management warning staff to brace for tough times).
"Not all employees have received the letter. There is no mail from the HR or the promoters on whether our jobs are safe or not,” an employee was reported as saying by the paper.
What should customers do?
According to TRAI rules, customers must be given a month's notice period in the event a telecom company decides to wind up its operations. Customers must be offered the porting-out service.
In the Aircel case, customers have said that they are unable to port, and do not have network at all. Many of these customers have registered their Aircel numbers to sign-up for a range of other services - banking accounts, gas connections, and other government services.
Lack of network and lack of the porting out option have left many lakhs of customers irate and disgruntled.
Here are a few irate customers sharing their grievances on Twitter:
But in another question titled- "A consumer has made a request for termination (closure) of the service. How long has he to wait? What about rentals and other dues?", the TRAI responds:
The service provider shall terminate the connection within seven days. They cannot charge rental or any other charges beyond the period of 7 days of request for closure made by the customer. Further, fresh bills shall be raised only after adjustment of the security deposit. The closure/ termination of service shall not be made conditional upon payment of dues/ bills/settlement of dispute. The outstanding amount of security deposits has to be refunded within 60 days of closure/ termination of service. In case of delay in refund beyond 60 days, a consumer is entitled to interest at the rate of 10% per annum for the number of days refund is delayed beyond 60 days.
This follows reports that Aircel Telecom, which has around 8.5 crore customers, could perhaps become India's fourth telecom company to halt services in the past three years, as rising costs, and risks of bankruptcy loom large over the company.
Company officials were quoted in another Economic Times report as saying that they were approaching the National Company Law Tribunal (NCLT) to file for bankruptcy proceedings.
The company has been reported to have issues with Directors resigning from the board, and a lack of funding. Kaizad Heerjee, Chief Executive Officer at Aircel, was quoted as saying that the company expects coming days to be difficult, also admitting that millions of customers have been impacted.
Since September, debts grew to a whopping Rs 15500 crore, and no lenders are willing to support Aircel or its business. The debts have been rising on account of interconnect charges, termination charges to other operators, license fees and costs on vendor fees and maintenance of network up-time. Servicing interest-payments on loans has also been a challenge for Aircel.
Revenue for quarter ending December 2017 was Rs 512 crore, in comparison to projected revenues of Rs 1435 crore every quarter. The situation has worsened. For instance, Aircel's quarterly operating profit of Rs 120 crore in July 2016, dropped to Rs 5 crore by July 2017. For December the company reported a Rs 120 crore loss on its books.
The financial mess at Aircel has led to Idea Cellular snapping its interconnection services with Aircel, and dues of Rs 60 crore have been pending for three months. Tower vendors resorted to switching base stations off for non-payment of dues, and a RBI decision on freezing Aircel's accounts, calling it an NPA has hit the company severely.
Aircel's parent company - Maxis, run by Malaysia-based billionaire T Ananda Krishnan - contemplated cash infusion, but has opted to hold back instead, according to insiders at the company. To make matters worse, Aircel's lenders and network service providers have not been made payments for the past nine months, starting September, and even existing lenders have refused to offer a restructuring or additional provisioning of loans.
Although services were stopped in six circles, the Tamil Nadu circle, the most profitable circle for Aircel has maintained healthy revenue. But even in Chennai, customers complained of patchy network and trouble in porting out from Aircel. India's sixth largest telecom company has a subscriber base of nearly 8.5 crores according to a 2015-16 TRAI (Telecommunication Regulatory Authority of India) report, and nearly 1.5 crore customers are from Tamil Nadu alone.
Although the company is yet to press bankruptcy proceedings, the unforeseen event is expected to bring inconvenience to a large number of lenders, network service providers, employees and also customers.
Rising Customer's Discomfort
Customers have already started thronging offices of Aircel after they found themselves unable to port out from Aircel. Over 12 lakh customers - 3 lakh on Tuesday and 9 lakh on Wednesday - attempted to port out to other service providers.
According to a report in The Hindu, police pickets have been placed at Aircel Offices in Tiruchi. The company executives have told customers that there has been no intimation from the top management of a shutdown, and customers have started panicking from the network issues.
The Hindu Business Line reports that more than 5000 Aircel employees have themselves applied to port their numbers, but failed to do so.
These employees are worried about their jobs too.
"We have read media reports (about a letter from the management warning staff to brace for tough times).
"Not all employees have received the letter. There is no mail from the HR or the promoters on whether our jobs are safe or not,” an employee was reported as saying by the paper.
I gone to one of the Aircel store in Chennai. The store was closed but seen the marketing people of Idea, Airtel and a lot of rush is there ahead of these marketing champs. Beware #Aircel . Kindly let us know what was the problem and what was the real time to solve this issue?— Avudaiappan (@Avudaiappan3) February 22, 2018
What should customers do?
According to TRAI rules, customers must be given a month's notice period in the event a telecom company decides to wind up its operations. Customers must be offered the porting-out service.
In the Aircel case, customers have said that they are unable to port, and do not have network at all. Many of these customers have registered their Aircel numbers to sign-up for a range of other services - banking accounts, gas connections, and other government services.
Lack of network and lack of the porting out option have left many lakhs of customers irate and disgruntled.
Here are a few irate customers sharing their grievances on Twitter:
i am aircel user i dont have netwrk i am from chennai.. i need port code 8675379571.. i dont have network. my all update i give this number. my number change any chances to Vodafone.. pls indimate pls... i am ready to port in our network— Praveeng Praveeng (@PraveengPravee1) February 21, 2018
@Aircel Guys I have sent a sms to port to other network (PORT mobile no to 1900) and after that I didn't receive any sms for porting. After sometime the network is gone and it's been a day since I got the network signal. I'm from chennai, kindly look into it guys.— MuthuSreePrasanth (@_Prasanth01) February 22, 2018
An FAQ page on the website of TRAI says that the TRAI does not envisage handling of consumer complaints. "The TRAI Act, 1997 does not envisage handling of individual consumer complaints by TRAI. As per the Telecom Consumers Protection and Redressal of Grievances Regulations, 2007, in case a consumer has a complaint, the first step is to register the complaint at the toll free Call Centre number of the service provider and obtain a docket number, confirming registration of the complaint," reads the manual.There is no network for @Aircel in many places around Chennai and Tamilnadu. Unable be to reach many aircel customers. @DoT_India need your intervention on this.— anish raj (@anishraj_19) February 22, 2018
But in another question titled- "A consumer has made a request for termination (closure) of the service. How long has he to wait? What about rentals and other dues?", the TRAI responds:
The service provider shall terminate the connection within seven days. They cannot charge rental or any other charges beyond the period of 7 days of request for closure made by the customer. Further, fresh bills shall be raised only after adjustment of the security deposit. The closure/ termination of service shall not be made conditional upon payment of dues/ bills/settlement of dispute. The outstanding amount of security deposits has to be refunded within 60 days of closure/ termination of service. In case of delay in refund beyond 60 days, a consumer is entitled to interest at the rate of 10% per annum for the number of days refund is delayed beyond 60 days.
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