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RCOM reportedly set to bow out of wireless business

25 Oct 2017

Beleaguered cellco Reliance Communications (RCOM) is reportedly set to restructure its wireless business within the next 30 days by closing down a substantial portion of its operations, the Economic Times (ET) reports, citing an audio recording of senior Reliance executive Gurdeep Singh. In the recording – which ET said it could not independently verify – the official informed employees that the company would ‘bring the curtains down’ on its wireless business within 30 days. ‘Segment wise, ILD voice, consumer voice and 4G dongle post-paid will be migrated to enterprise as long as it is profitable but, besides these three, everything else will be shut down,’ Mr Singh was quoted as saying. The official attributed the company’s struggles to the prolonged process of merging with Russian-owned Sistema Shyam TeleServices Limited (SSTL/MTS India) – which only received its final approval this week despite the deal having been agreed back in November 2015 – the aborted merger with Aircel and the closure of its CDMA business, which contributed to the loss of nearly 20 million subscribers (around a fifth of its subscriber base) between June 2016 and June 2017. Mr Singh added that newcomer Reliance Jio Infocomm (Jio) had also crippled several operators and undermined the industry by offering unlimited free calls in a sector that still relies heavily on revenue from basic voice services. Notably, Jio is owned by Mukesh Ambani, the brother of RCOM chairman and owner Anil Ambani.

Alongside the aforementioned elements that will be transferred to Reliance’s enterprise division, the cellco’s telecom tower business will remain operational, as the unit will continue to generate revenue from its other tenancies, including Jio. RCOM is, however, involved in talks to sell the business to Canada’s Brookfield Infrastructure Partners.

India, Aircel, Reliance Communications (RCOM), Reliance Jio Infocomm (Jio), Sistema Shyam TeleServices (SSTL, MTS India)

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