Aircel, Aircel Cellular Limited and Dishnet Wireless Limited have filed for corporate insolvency after no agreement could be made on debt restructuring with its main lenders, the Hindu reported.
The companies stressed that they are not seeking to liquidate the company but to find the best resolution to its financial woes that would be in the best interests of vendors, distributors and employees.
Aircel will try hard to ensure service continuity for its customers throughout the bankruptcy period. But major operators such as Idea Cellular and Vodafone India have already halted interconnect services with the operator due to non-payment of dues.
Aircel is a casualty of the intense competition gripping the Indian market triggered by the entry of Reliance Jio Infocomm. The company had attempted to participate in the wave of consolidation sweeping the sector in response, but a planned merger with Reliance Communications was called off in October due in part to regulatory uncertainty.
As a result of the competitive pressures gripping the mobile sector, Norway-based Telenor is exiting the market, transferring its assets to Bharti Airtel, while Reliance Communications has shut down its wireless services and arranged to sell its wireless assets to Jio and Tata Teleservices has sold its mobile assets to Airtel. Meanwhile Vodafone India and Idea Cellular are planning to merge to create India's largest operator by subscribers.