Struggling Indian operator Aircel reportedly plans to shut down operations in six unprofitable telecoms circles, and is in talks over a potential sale of the company.

Aircel is halting services in Uttar Pradesh West, Haryana, Gujarat, Madhya Pradesh, Maharashtra and Himachal Pradesh – six of India's 22 telecoms circles, citing people familiar with the matter.

Aircel offers 2G services in these circles and has around 4 million users, as well as network-sharing deals with Tata Teleservices and Reliance Communications.

The move is expected to improve operating profit to over 12 billion rupees ($186 million) per year and help the operator reduce its debt of around 155 billion rupees.

Spectrum in the circles will be returned to the government, while Aircel will maintain its operations in other circles, concentrating on carving out a niche in the low end of the market.

Aircel had initially planned to tackle its debt woes through a merger with Reliance Communications, another operator struggling with heavy debt. But this deal collapsed in late September as a result of regulatory uncertainty as well as opposition from some RCom creditors, leaving both operators scrambling for a plan B.

According to the report, Aircel is in talks over a potential sale to one of the major operators, with incumbent Bharti Airtel having already expressed an interest in a deal. – Telecom Asia 


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