Videocon Telecommunications Limited, the telecom subsidiary of Videocon Industries is winding up its operations in most circles in India, following the cancellation of its licenses in the Supreme court judgement, reports Telecom Talk. The report cites sources to inform that Videocon will shut down its operations in all circles except the ones which have more than 5 lakh customers namely TamilNadu, Punjab, Haryana and Mumbai & Maharashtra.
Videocon Telecommunication, previously known as Datacom had acquired 2G licenses for 21 telecom circles in January 2008, however the company didn’t start operations for three years due to an internal dispute between its co-owners the Nahatas and the Dhoot family. In Feb 2010, things finally fell into place with Mahendra Nahata exiting the business for a payout of close to Rs 14 billion and Datacom being rebranded as Videocon Telecommunications Limited.
A month later, Videocon started its GSM services in Coimbatore, offering lifetime validity to all its customers. Prior to this, it had also signed an infrastructure-sharing agreement with Tata Teleservices in August, 2009 and a $400 million tower sharing deal with Aircel for 5000 towers in September 2009.
However, in February 2012, the company’s licenses got revoked, as part of the Supreme court judgement which cancelled 122 licenses issued to nine telecom operators in January 2008. Few weeks back, the company had announced in its financial results that it will continue its 2G operations and that it intended to participate in the upcoming spectrum auction. As of January 2012, the operator had a user base of 5.4 million.
Videocon will now be the third operator to shut down or winding up its operations in India. Earlier this month, Etisalat has started winding up the operations of Swan Telecom (Etisalat DB Telecom Pvt Ltd), citing a complete breakdown in the relationship between Etisalat and its Indian partners, Shahid Balwa and Vinod Goenka, who face criminal charges of corruption associated with Swan’s acquisition of UAS licences. S Tel, the joint venture between Siva Group and Bahrain Telecommunications Company (Batelco) had also shut down its services in India and was helping its users switch to other operators, after the cancellation of its licenses in 6 circles by the Supreme Court.