I wouldn't have let Aircel collapse, says founder C Sivasankaran
07 March 2018
The founder of near-defunct telecoms firm Aircel, C Sivasankaran, said the telecom operator would have stayed afloat had the reins remained with him.
''I would have anticipated the situation and created capacity to handle data at lower prices,'' the serial entrepreneur told The Economic Times on the phone.
Sivasankaran started the telecom firm in 1999, launching services initially in Tamil Nadu. In 2005, he sold it to Malaysia-based Maxis Communications, founded by Ananda Krishnan.
''There's an inbuilt unviability in Aircel now. The banks should have taken personal guarantees from Ananda Krishnan,'' he said.
Aircel and its two units approached the National Company Law Tribunal (NCLT) last month, seeking to resolve its debt issues under the Insolvency and Bankruptcy Code as the outstanding arrears to financial and operational lenders topped Rs50,000 crore.
It sought an urgent hearing to appoint an interim resolution professional to help resolve matters such as continuation of services, repayment of loans and payment of salaries. (See: With no turnaround prospects, Aircel files for bankruptcy).
Sivasankaran said he had ''tremendous respect'' for Krishnan, but that their ways of working were different.
''He is a good entrepreneur and has tried his best for the company. However, he should have sold the company to AT&T when the opportunity was there,'' he said.
In 2008, US mobile firm AT&T held talks with Maxis to buy out its 74-per cent stake in Aircel to enter the Indian telecoms industry, but couldn't clinch a deal due to differences over valuation.
Sivasankaran was at the heart of the controversy after the Maxis deal when he alleged that he was forced to sell Aircel.
Aircel hasn't been able to service its debt due to falling revenue and dwindling cash flow since Reliance Jio entered the market in 2016, triggering a price war as telcos competed to match the newcomer's cheap rates. The woes were compounded after Maxis stopped funding it.
Most of Aircel's debt comes from loans raised to buy spectrum, including broadband wireless airwaves in 2010.
A recent effort to merge the company with Reliance Communications was hit by delays in regulatory approvals and a SC order banning Aircel from selling its spectrum in connection with a separate case.
All creditors of Aircel, including other telcos, tower companies and equipment suppliers, are now preparing to approach the NCLT to recover their dues. Idea Cellular and Vodafone India have stopped connecting calls from Aircel's network to their own due to non-payment of interconnection fees.