Troubled mobile-phone service provider Aircel, in which Malaysia’s Maxis Communications Bhd has a majority stake, is making an all-out effort to remain afloat.
The company, burdened with a debt of 155 billion rupees ($2.4 billion), filed for bankruptcy on Wednesday, and is now in talks with investors for strategic financing.
It is also negotiating with Bharti Airtel and Reliance Jio Infocomm for intra-circle roaming pacts.
Aircel is also in talks with a key vendor to keep its network running and preserve the company’s value, the Economic Times has reported.
Sustaining the company’s value is critical as it will allow an interim controller to find bidders for the telecom company with a view to continuing its operations for the long-term and repaying lenders.
Aircel wound up services in six areas – Gujarat, Haryana, Himachal Pradesh, Madhya Pradesh, Maharashtra and Uttar Pradesh (West) – from January 31, to focus better regions where it performs best.
After a competitive onslaught unleashed by Reliance Jio Infocomm, owned by India’s richest man, in September 2016, Aircel had slipped into the red and in December its operating loss was 1.2 billion rupees ($18.4 million).
Aircel’s attempts to merge last year with Reliance Communications, another troubled entity, came undone after delays in regulatory approvals due to legal hurdles.
Aircel is the latest in a long list of casualties, including Tata Teleservices and Telenor, in the Indian telecom market that only a few years ago was seen as attractive to foreign players.
Call rates in the country have plunged to some of the lowest levels worldwide amid cut-throat competition and this has made India a difficult market to survive in.