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Tata Sons may soon shut down Tata Docomo Services !!

Tata Sons may soon shut down Tata Docomo Teleservices !! 
The Tata Group informed the government on Friday that it plans to shut its wireless business, bringing an end to its 21-year-old phone services venture.

 Tata group chief financial officer Saurabh Agrawal and Tata TeleservicesBSE -3.16 % managing director N Srinath were among executives who met Department of Telecommunications (DoT) officials 

“Once they begin, they have to complete the process within 60 days.” The carrier, which has a listed subsidiary, Tata Teleservices (Maharashtra), has operations in 19 circles in India. A Tata Sons spokesperson did not comment on the development. 

This will be one of the first big Tata units to be shut in the group’s 149-year-old history. Tata Teleservices, which was set up in 1996 with landline operations, has had a checkered history. It launched CDMA operations in 2002, then adopted GSM in 2008 and received Rs 14,000 crore of investment from NTT Docomo, which eventually decided to exit the joint venture in 2014. 

Tata Teleservices, which as per the telecom regulator has a 3.5% share of wireless customers with 42.09 million users as of July, has been making losses and currently has a debt of around Rs 30,000 crore, weighing down holding company Tata Sons’ financial performance. The company needs to give its users notice of 30 days before shutting services. A call made to its call centre revealed that the telco has already stopped taking on new users in several circles. 

Its weak performance meant NTT Docomo decided to exit their joint venture three years ago and the Tata group suffered a setback here as well, having to buy out the Japanese company’s 26% stake for over Rs 7,000 crore. 

New Tata Sons chairman N Chandrasekaran’s options have been limited options with regard to Tata Teleservice — either to keep pumping in money into the loss-making carrier or to restrict further losses by shutting it down.The third option of selling the business had failed after many attempts. The company is said to have been previously in separate talks for consolidation with Vodafone, well before Chandrasekaran took over, and with Bharti Airtel under the new chairman’s watch among others, but none of the deals worked out, due mainly to the company’s debt. 

On the operations side, the Tata group company has been facing immense pressure over the years to retain subscribers and invest in operations amid ever-increasing competition. This was aggravated by the entry of Reliance Jio Infocomm in September 2016. For the financial year ended March, Tata Teleservices reported a net loss of Rs 4,617 crore.

Its the ending a 21-year-old business venture.