Tata Tele may only partially exit telecom biz: Report

The Tata group will reportedly retain some of the profitable ventures of its telecom business such as the optic fibre unit even as it plans to completely exit the telephony business which has incurred massive losses in the recent past.

A source informed LiveMint the group is not planning to sell the entire telecom business after facing a lot of flak since competition stiffened.

"There is a lot more to Tata Teleservices than just the mobile telephony business. There’s a huge loss in subscriber base month-on-month and revenue reduction as well. This started ever since Reliance Jio came into existence," the source said.

The Tata Teleservices which was at the centre of a dispute between Tata Sons and its partner NTT Docomo of Japan had already started cutting down its operation before Reliance Jio entered the market and has a very limited footprint as of now.

In a letter to the Tata Sons Board by the former chairman of the Tata holding company Cyrus Mistry had written, "Of all the companies in the portfolio, the telecom business has been continuously haemorrhaging. If we were to exit this business via fire sale or shut down, the cost would be (US dollar) 4-5 billion".

Tata Teleservices' net worth in 2016-2017 was cut down by Rs 11,650 crore while it incurred a loss close to  Rs 2,409 crore in 2016. Revenues fell sharply to Rs 9,666 crore in FY17 as compared to Rs 10,708 crore in FY16.

The shutting down of the mobile services arrived at a time when Tata Son's is looking to restructure its portfolio under Chandrashekharan's leadership. With almost 100 companies in its fold, it is strategizing to get rid of non-core loss-making businesses while pumping up investment in companies that are generating profit.