Billionaire Anil Ambani-led Reliance Communications (RCom) will shut down its loss making wireless telephony business by November 30 and concentrate only on 4G Internet services.
The debt-laden firm has asked its 1,500-2,000 employees to look for jobs as 2G and 3G cellphone services business will be shut down from November 30, sources in the industry and those privy to the development said.
Refusing to comment on the shutting down of the wireless business, the company issued a short statement, saying it will adopt a 4G focused strategy for profitable growth of its wireless business.
“As already announced on October 1, 2017, RCom has decided to adopt a 4G-focussed strategy for profitable growth of its wireless business. Accordingly, RCom will be optimising its 2G and 3G footprint, and related infrastructure and human resources, with effect from November 30, 2017,” it said.
RCom said its “4G-led strategy will be executed, as at present, on the back of capital-light access to India’s most extensive 4G mobile network, through already operational spectrum-sharing and ICR arrangements with Reliance Jio”.
The company’s more than 40 million customers will have to upgrade to 4G or migrate to other operators, the sources said.
On October 1, it had called off a proposed merger with Aircel, citing regulatory and legal hurdles. The merger was seen as vital for its survival in the intensely competitive telecom sector.
RCom is in the midst of a strategic debt restructuring, under which it has entered into a standstill agreement with banks requiring it not to pay any interest or principal till December 2018.
With Rs 44,000 crore of loan on its books, the company is also shutting down its direct to home television business from next month after it failed to find any buyer for the business.