Tata Sons, the holding company of Tata group of companies, has written off its investment in the loss-making, Tata Teleservices, as reported by Press Trust of India.
Tata Sons is in the process of differentiating the consumer and enterprise parts of the business and transferring the mobile consumer side to Bharti Airtel. The enterprise segment will be merged with Tata group’s networking arm, Tata Communications.
“The company has considered it appropriate to write off the entire investment of Rs 28,651.69 crore in Tata Teleservices Limited,” Tata Sons said in a filing. This writing off has impacted the balance sheet of Tata Sons as profits nosedived to Rs 4,379 crore at the end of 2017-18 compared to Rs 18,432 crore in 2016-17.
Tata Teleservices has been on a downslide since the Supreme Court cancelled its three telecom licenses on account of the telecom scam under the Congress-led UPA government. This was followed by tensions between Tata and its partner, NTT Docomo. The latter withdrew its investment in Tata Teleservices.
With the entry of Jio, backed by the billionaire, Mukesh Ambani, the telecom market has entered into a consolidation mode and players like Vodafone and Idea have joined hands to improve their market share. As of October 2018, the market is embroiled in a three-way war between Jio, Airtel and Vodafone-Idea.
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