Facing distributors’ ire, Aircel staffers knock on PMO’s door seeking help
, ET Bureau|
Updated: Mar 05, 2018, 12.05 PM IST
As beleaguered telecom operator Aircel proceeds with its decision to approach the National Company Law Tribunal (NCLT) to resolve its financial crisis, its employees claim to be left to fend for themselves against belligerent distributors demanding that the company compensate them for their unsold inventory running into crores in value. Last Thursday, they decided to speak out.
In letters sent to The Prime Minister’s Office, as well as home, and communications and IT ministries, Vivek Kumar, HR head for Delhi, Punjab, Himachal Pradesh and Uttar Pradesh (west), laid out in stark terms the wrangle underway between various vendors and employees of Aircel.
“There is huge outstanding amount payable by the company to various vendors including security agency, housekeeping staff and distributors, and all these vendors are chasing the employees of the company and threatening the life of the employees. Some of our employees are being threatened at home,” he wrote in the letter accessed by ET.
Another letter accessed by ET, written by employees to members of the board, including former member Apollo Hospitals’ managing director Suneeta Reddy, communicated that employees were left with little choice but to stage ‘dharnas’ to protect their interest.
Distributors spend anywhere between Rs 2 lakh to Rs 25 lakh a month in buying SIM cards and recharge vouchers of telecom operators, which they supply to retailers to conduct their businesses at a margin of 1.75%. Typically, a distributor employs about four people who are designated areas within a circle to cater to the retailers. In Tamil Nadu, even as distributor strength dwindles, there are about 800 of them. Nationally, the figure, according to at least two top executives who wished to remain unnamed, has been estimated roughly at 2,000 and their stuck investments at Rs 150 crore.
Speaking to ET, Kumar said the suddenness of the network outages in late February triggered panic among distributors. “A few months ago, we were pushing the distributors with our stocks,” he said. Multiple top executives in Aircel concur that it was still a puzzle as to why the company had kept up distribution of stocks till February. One official said: “In fact, even now, we are pushing for intracircle roaming arrangements with other telecom operators in India so that at least the distributors can make money of the stocks with them.”
Queries sent to Aircel remained unanswered at the time of going to the press. But in an earlier statement, Aircel had said the “Corporate insolvency resolution process is not a proceeding for liquidation,” and that it would be in the best interest of everyone, including distributors and employees. An Aircel official in charge of sales in one of the key metros said that discussions with distributors were being held every day. “Now all depends on NCLT,” said the sales head. His circle, which generally holds stocks for only two-three days, now bears inventory that can last upto 15 days. Billing for new SIM cards has been suspended from the time the firm filed for insolvency resolution.
Aircel lost 3.5 million subscribers in January even as Bharti Airtel and Vodafone added 1.5 million and 1.2 million respectively to their user bases, according to data from the Cellular Operators Association of India.
The company suffered sudden network outages in late February, sending hundreds of customers to Aircel’s retail outlets seeking to port out of the network. Malaysia-based Maxis Communications owns 74% while the rest is held by Sindya Securities and Investments, founded by Suneeta Reddy and her husband P Dwarakanath Reddy.
In letters sent to The Prime Minister’s Office, as well as home, and communications and IT ministries, Vivek Kumar, HR head for Delhi, Punjab, Himachal Pradesh and Uttar Pradesh (west), laid out in stark terms the wrangle underway between various vendors and employees of Aircel.
“There is huge outstanding amount payable by the company to various vendors including security agency, housekeeping staff and distributors, and all these vendors are chasing the employees of the company and threatening the life of the employees. Some of our employees are being threatened at home,” he wrote in the letter accessed by ET.
Another letter accessed by ET, written by employees to members of the board, including former member Apollo Hospitals’ managing director Suneeta Reddy, communicated that employees were left with little choice but to stage ‘dharnas’ to protect their interest.
Distributors spend anywhere between Rs 2 lakh to Rs 25 lakh a month in buying SIM cards and recharge vouchers of telecom operators, which they supply to retailers to conduct their businesses at a margin of 1.75%. Typically, a distributor employs about four people who are designated areas within a circle to cater to the retailers. In Tamil Nadu, even as distributor strength dwindles, there are about 800 of them. Nationally, the figure, according to at least two top executives who wished to remain unnamed, has been estimated roughly at 2,000 and their stuck investments at Rs 150 crore.
Speaking to ET, Kumar said the suddenness of the network outages in late February triggered panic among distributors. “A few months ago, we were pushing the distributors with our stocks,” he said. Multiple top executives in Aircel concur that it was still a puzzle as to why the company had kept up distribution of stocks till February. One official said: “In fact, even now, we are pushing for intracircle roaming arrangements with other telecom operators in India so that at least the distributors can make money of the stocks with them.”
Queries sent to Aircel remained unanswered at the time of going to the press. But in an earlier statement, Aircel had said the “Corporate insolvency resolution process is not a proceeding for liquidation,” and that it would be in the best interest of everyone, including distributors and employees. An Aircel official in charge of sales in one of the key metros said that discussions with distributors were being held every day. “Now all depends on NCLT,” said the sales head. His circle, which generally holds stocks for only two-three days, now bears inventory that can last upto 15 days. Billing for new SIM cards has been suspended from the time the firm filed for insolvency resolution.
Aircel lost 3.5 million subscribers in January even as Bharti Airtel and Vodafone added 1.5 million and 1.2 million respectively to their user bases, according to data from the Cellular Operators Association of India.
The company suffered sudden network outages in late February, sending hundreds of customers to Aircel’s retail outlets seeking to port out of the network. Malaysia-based Maxis Communications owns 74% while the rest is held by Sindya Securities and Investments, founded by Suneeta Reddy and her husband P Dwarakanath Reddy.
