Tata Tele may soon shut its CDMA operations

The loss-making Tata Group telco Tata Teleservices will gradually shut its CDMA operations—running on the 850 Mhz—and write off its equipment value. The company's airwaves across all 22 circles in the band can't be used for 4G as they weren't bought in auctions.

The company, which has been looking for a buyer for long, may look to buy some 850 Mhz band spectrum in the three circles of Andhra Pradesh, Mumbai, and Maharashtra, where its permits are up for renewal in the upcoming sale. It may also buy some in the cheaper 1800 Mhz band. Both the bands can be used for 4G services.

However, the Tata Group doesn’t want to be invested in the business for the long term. The upcoming auctions are scheduled for late August or early September. The Tata Group Company is likely to have a coffer of around Rs 7,000 crore for the upcoming spectrum auction. The Tata group approved the investment of Rs 3,000 crore in Tata Teleservices at a board meeting held on June 25.

In the quarter that ended on March 31, Tata Teleservices Maharashtra, listed on stock exchanges, running Mumbai and Maharashtra service areas for Tata Teleservices, reported Rs 29 crore loss as a "provision for impairment of CDMA fixed assets" given that the license is expiring in September 2017.

Tata Teleservices is the only CDMA operator left in the Indian telecom market, after MTS, the brand name for Sistem Shyam that merged into Reliance Communications, also announced that it is shutting its CDMA network in favour of 4G services.

Tata Teleservice had elected to use CDMA as its preferred mobile technology in 2003, shortly after Reliance chose it too. Then it adopted dual technology in 2008, also in tandem with Reliance.