Idea snaps interconnection with Aircel over non-payment of dues

Our Bureau Mumbai | Updated on February 07, 2018

The Indian mobile industry witnessed another year of hyper-competition as well as high regulatory headwinds.   -  Reuters

Thousands of mobile users were left stranded on Wednesday after Idea Cellular suspended interconnection with Aircel, citing non-payment of dues. Customers of both the companies were not able to make calls to each other’s network.

“Idea Cellular regrets the inconvenience caused to mobile users who are unable to connect with each other. We sincerely hope that the operator (Aircel) will honour its contractual obligation and payment commitment, in the interest of customers,” Idea Cellular said in a statement.

“Despite several reminders for releasing the dues since November 2017, Aircel has failed to meet its payment commitments forcing Idea to suspend interconnect services, as per the terms of interconnect agreement between both parties,” the company added.

When contacted a spokesperson for Aircel said, “The state of the industry is bad, we are in active discussions with all our stakeholders to do the best we can under the present difficult business environment and the ongoing Strategic Debt Restructuring process.” Aircel did not say as to when it will be able to make payments. Idea said it will restore the services only when Aircel clears the outstanding dues.

An industry insider said that this could be an indication that wheels may be coming off debt-laden Aircel’s operations. In January, BusinessLine had reported that Aircel was in talks with lenders and shareholders to find a way out of its current crisis.

The options being explored included a potential merger with Airtel or launching 4G operations through spectrum-sharing partnerships. Aircel, in which Malaysia’s Maxis Communications Bhd owns a 74 per cent stake, may find it difficult to sustain operations for its nearly 88 million subscribers and prevent job losses of its about 5,000 employees if it does not arrive at a solution to deal with its ₹16,000 crore-debt pile.

TRAI to probe

Meanwhile, sources in the TRAI said the regulator could examine the unilateral decision by Idea Cellular to pull the plug of Aircel. “TRAI has recently spelt out rules governing interconnection. The move by Idea will be put to scrutiny,” said the source.

Interconnection between operators is the basic requirement for calls to travel from one operator’s network to the other. Incidence of snapping interconnection has been rare BSNL had disconnected some private operators in 2011 due to non-payment of dues.

In 2003, the then larger incumbent operator MTNL, under political pressure, pulled the plug on interconnection with private operators’ networks.

Published on February 07, 2018

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