Reliance Jio Infocomm a 95% subsidiary of Reliance Industries Ltd controlled by Mukesh Ambani and Reliance Communications controlled by Anil Ambani have joined hands at the beginning of FY 2014. Anil is meeting Mukesh every fortnight to discuss co-operation in business. Ambani’s have manipulated Government policies to suit their needs and what are the chances that they may do it again ?
The following chart shows the Spectrum Spread of Reliance in GSM / CDMA / 3G and 4G LTE Bands
If there is further collaboration between RCOM and RIL, this will create another well-funded player in the market with networks, distribution, customers, spectrum and importantly, cash flows – RIL is a net cash company, while RCOM has around USD7.5bn in
net debt. This could benefit both RIL (in terms of accelerating the rollout) and RCOM (in terms of deleveraging their balance sheet). However, there are likely to be regulatory, and various other, hurdles to overcome such as spectrum sharing, etc.
The question remains what will be their competitive strategy. No doubt there will be many different views, eg, there is no room to cut prices anymore or too early to make data work etc; but as seen with the BWA auctions in 2010, where RIL came completely out of left field and acquired pan-India 2.3GHz spectrum, any launch strategy or plans will be tightly held.