Tata Tele-Services withdrawing Tata Docomo from Jammu & Kashmir
Tata Tele-Services Limited (TTSL) announced the closure of its Tata Docomo in J&K.
“The announcement was dramatic,” one of the middle rank officials serving in the valley, said. “We were assembled in a conference hall and switched on the screens hoping that the meeting was to announce Diwali bonus but then they said the services are being withdrawn by January 17.”
Around 120 direct employees serving nearly 115 thousand customers across the state will be getting salary for three months and their jobs are over. Some of the employees have been given an option of moving to other centres outside J&K, if they wish so. The company is indecisive, however, what it plans to do with its subscriber base and part of the infrastructure that it has built in the state since later 2008 when its operations started.
“This is not something that we have done voluntarily,” Ms Saroor Hussain, the company’s corporate communication official told The ET. “It was basically the apex court verdict that cancelled our licences for three circles including J&K.” The court had cancelled 122 permits in its February 2012 verdict that included three that TTSL owned. She clarified that though there were an option for participating in the re-auction but “we found the reserve price for spectrum extremely high which could impact profitability”. So the company skipped participating in the auction and decided to wind up.
The government, according to reports, had fixed a reserve price of Rs 4550 crore for each block in 800 MHz band, required for CDMA services. TTSL along with Videocon had initially applied for bidding in CDMA spectrum auction but later creating a situation in which radiowaves in 800 Mhz band are with no bidder now.
Atul Kansal who heads the company’s operations in the state refused to offer any details. “Right now, I am sorry I can not share anything with you,” Kansal said. “Our customers will get a detailed communication from us in due course of time.”
Ms Hussain said the company, right now, is in the process of negotiating deals with our partners and the employees. “Within 10 days, we will be in a position to offer details about what we intend to do,” she said.
At the time of launching its services in J&K in December 2008, TTSL said it has invested around Rs 100 crore in the infrastructure. Right now it is not known if it is negotiating any deal with the existing licence holders to rent-out its infrastructure or sell it completely. Insiders in the company said that the company was owning barely 30 sites as most of the other infrastructure it utilized either belonged to various infra companies or to other service providers on mutual benefit basis. “It has intimated its partners that the deals are over,” an insider said.
Its competitors in the state are keen to know what is cooking up in Tata. “We are trying to get some details but there is complete secrecy,” an executive of a major operator in the state said. “But it must be public almost a month ahead of its formal closure.”
Though TTSL had many products in its basket but it was known mostly for its Photon, a CDMA platform product. Almost all other operators in the state are offering similar services and if subscribers get the portability, they will choose their own options. “Customers will choose their new service provider on basis of their experience, size of the operator and obviously the dependability of the service,” an executive of a service provider said. “There is a possibility of the competitors actually coming up with attractive product to get their bit of the cake.”
One of the TTSL dealers said they were approached by other service providers who are offering discounts to TTSL customers. “There is possibility of BSNL getting benefitted because it has some market share from and better infrastructure,” one dealer said. The central PSU that has ceased to grow in J&K market has already launched a campaign to attract the TTSL subscribers.
J&K is one of the fastest growing markets for the mobile telephony. Besides 720 thousand CDMA service users in the state, J&K by the end of October had 5992185 active GSM subscribers with one of the highest Average Revenue Per Unit in India. J&K spends around Rs 1000 crore a year on cell phones and the services.
Subscribers expect the company might offer free services to them as compensation. TTSL dealers have started negotiating deals with other players to keep the show going on. At the end of the day, it is the credibility of TATA empire that people talk out. “They sell as long as they make profit,” says Altaf Ahmad, a photon user. “They stop when it does not help them make more money.” TATA presence in J&K now is mostly an automobile story.