Editorial: Say Tata to telecom

Apr 26 2014, 13:50 IST
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SummaryTatas will have to pay DOCOMO Rs 7,250 crore in the next month or two...

end of FY13. It would be far more advantageous for an existing telco to buy new spectrum when it is available.

Given the way the business has fared, the way rivals are gaining market share, and the impending entry of Reliance Jio which will further depress tariffs to gain market share, the Tata’s need to seriously consider getting out of the business. Since that will involve taking a big hit on the debt, for now, perhaps the group’s best bet is to wait for the spectrum trading rules which will allow it to sell its spectrum holdings without a prospective buyer having to take on the associated debt. At some point, though, the Tatas will have to take the hit, and dial out of the business.

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