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RCOM to shut down its 2G mobile business by end-November, 2017

October 25, 2017

Reliance Communications (RCOM) has decided to shut down its 2G operations by November 30, 2017. However, the debt-ridden company will continue to operate ILD voice, consumer voice, 4G dongle post paid services and 3G/ 4G services till the time they remain profitable.

The operator has stated that 60 per cent of its customers, who are using 2G-based technology, will be asked to either migrate to better technology or port out to some other operator. The company is in the midst of a strategic debt restructuring plan and lenders have the option to convert part of their loans to equity by December 2017. The company is also a standstill agreement with banks under which it need not to pay any interest or principal to the lenders till December 2018.

Meanwhile, RCOM is also shutting down its direct to home television business from November 2017 after it failed to find any buyer for the business.

The company has Rs 440 billion of loans on its books and is finding it hard to service its dues to increased competition from Reliance Jio Infocomm Limited (RJIL) which is offering voice for free.

Earlier, a lifeline merger transaction between RCOM and Aircel had collapsed following delay in getting approvals from the courts and other authorities like Department of Telecommunications (DoT). This also impacted its deal with Brookfield to sell its telecom towers for Rs 110 billion. RCOM was planning to use the funds to repay its loans.

 

 
 

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