The failure of Tata Docomo

Why did TATA Docomo fail?

Tata Docomo was a joint venture between Tata teleservices and a Japanese telecom company called NTT Docomo. Tata Docomo came into existence in 2008 and it has 2G and 3G services in India. The company provided several services for its customers and has received many business awards for its telecom services. But some serious factors affected its performance and led to the failure of Tata Docomo. In this study, the various reasons for the failure of the company are discussed.

Reasons for the failure of Tata Docomo

1.Competition from other telecom market players

Tata Docomo faced intense competition from other telecom providers like Vodafone and Airtel, who had better infrastructure and more attractive services. It was difficult for the company to retain its customers and it failed to attract new customers.

2.Poor financial performance

The company failed to meet its standards and incurred huge losses. The competitors' low price offerings also reduced the margins for Tata Docomo.

3.Issues with partnership

Because of the low market share and revenue, NTT decided to exit from the venture and it significantly affected the business.

4.Lack of technological innovations

The company failed to upgrade itself from 3G to 4G and it also failed to upgrade its network coverage. So the customers switched to other service providers who provided more attractive offers and network coverage. So, the inability to adapt itself to the changing technologies caused customer dissatisfaction.

5.Cancellation of license

Three licenses of Tata teleservices were canceled by the supreme court and the court fined Tata teleservices for benefiting from the 2G telecom spectrum scam.

These are the main reasons for the failure of Tata Docomo.