Aircel likely to elevate COO Kaizad Heerjee to CEO’s position


November 28, 2013

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Aircel, a debt-ridden mobile phone operator, is likely to shortly elevate chief operating officer Kaizad Heerjee to the chief executive officer’s position, two people aware of the development told ET.

The company’s former CEO, Sandip Das, left the company about eight months ago to join Reliance Jio Infocomm, the mobile broadband venture of billionaire Mukesh Ambani, and Aircel hasn’t had a top officer since.

Heerjee joined the mobile phone company in August of 2012 from U Mobile, a Malaysian telecom services provider where he was the CEO. Chennai-based Aircel is 74% owned by Malaysia’s Maxis while Apollo Group owns the rest.

According to one of the people, Aircel has already sought security clearance from the telecom department, as per rules, for Heerjee’s appointment since he holds a Singapore citizenship.


Aircel declined to comment while Heerjee couldn’t be reached for comment.

The mobile phone operator, with licences to offer services in all of India’s 22 circles, was once gunning for top three status by number of users. But, caught in a vicious circle of cash and credibility for the past nearly three years, it has been languishing for several months now at number seven with some 64 million users, a far cry from leader Bharti Airtel which has around 200 million subscribers.

Heerjee’s move to the top comes amid the company’s struggle to service its Rs 24,000-crore debt, due in January 2014. According to people aware of the company’s financial details, the telecom operator was losing aroundRs 1,680 crore annually at the operating level till last fiscal year ended March 31.

ET had earlier reported that the company had tied-up loans for Rs 8,000 crore from a clutch of Indian and foreign banks to refinance the debt that it accumulated while purchasing third generation (3G) and fourth generation (4G) airwaves in auctions held three years ago.

Aircel paid Rs 9,937 crore for 3G airwaves — in 13 service areas — and broadband wireless, in eight circles. While it has launched 3G in different circles, its plans to launch high speed broadband 4G services have not taken off for the want of investments of around $1.5 billion and development of the handset ecosystem.

The company though recently conducted 4G LTE trials in Andhra Pradesh, but said it doesn’t have immediate plans of launching services.

The company also faces major regulatory challenges in India on account of a CBI investigation into the circumstances under which Maxis acquired the shareholding of serial entrepreneur C Sivasankaran in the company in 2005.

Aircel’s struggles have given rise to talk that the company is up for sale. Maxis had segregated the Indian operations back in 2011, indicating the group’s intention to put the company on the block. At various points, there has been speculation about Aircel dialing Tata Telesevices and Sistema Shyam TeleServices for a merger. All three companies haven’t previously confirmed any discussions.

India’s rules on mergers and acquisitions are expected to be announced before the end of the month, which may trigger much wanted consolidation in the fragmented sector with more than 10 players in some circles.