RCom’s retail mobile business is dead but nobody wants to say so, while Vodafone and Airtel lure its customers

Deepak, 02/11/2017
RCom’s retail mobile business is dead but nobody wants to say so, while Vodafone and Airtel lure its customers

Reliance Communications Ltd (RCom), the once flagship of Anil Dhirubhai Ambani Reliance group, has reportedly closed its mobile retail business leaving lakhs of subscribers in lurch. However, nobody, including the company, stock exchanges, market regulator SEBI, telecom regulator TRAI and even Department of Telecom (DoT) is ready to say anything officially on RCom's closure of mobile business.
 
Another surprising aspect is open advertisement from Bharti Airtel and Vodafone appealing RCom subscribers to switch to their network. While Airtel publishing full page advertisements welcoming RCom subscribers to its network, Vodafone is sending emails to own subscribers offering them Rs100 per month discount on bills for three months, if they can get a RCom subscriber to switch to its network.

The Reliance ADA group company has not shared any information with stock exchanges about shutting its mobile business. Its latest, regulatory filing talks about handing over controlling (51%) stake to lenders and building a new RCom. "RCom’s transformation journey is focused on viable, sustainable and profitable business to business (B2B) businesses with a strong domestic and global footprint. RCom’s B2B business portfolio comprises enterprise, carrier, internet data centre and global submarine cable network in India and overseas across continents. New RCom will rank among the Top three data players in India."
 
This statement does not utter a single word about RCom's retail mobile business, including 2G, 3G and 4G. Its regulatory filing, however, states, "These B2B businesses are stable, capital light and have sustained and predictable annuity revenues and profits, with immense growth potential amidst low competitive intensity. These businesses have no exposure to mobility and consumer business including fibre to home. They generate equal revenues from domestic and overseas operations."
 
As per RCom's debt restructuring plan, it would convert its debt of about Rs7,000 crore in to equity. Promoters will reduce their stake to 26% from 59%.
 
According to report from The Hindu, Mukesh Ambani-led Reliance Jio is likely to bid for assets of RCom. Quoting Puneet Garg, Executive Director of RCom, the reports says, "They [Jio] doe not want to deal directly but have shown interest in bidding for many of our assets in a transparent manner.”
 
Lenders of RCom have appointed SBI Capital Markets as advisor for monetising the company's assets, including spectrum, mobile towers, fibre and media convergence nodes, which will help the Anil Ambani group company to pay off debts worth Rs17,000 crore.
 
According to our information, and reports, few weeks ago RCom's co-Chief Executive (CEO) Gurdeep Singh had announced closure of the company's pan India operations in retail business by November 2017. In his communication to RCom's retail partners, Mr Singh, had said, "...I want to inform you that Reliance is going to Shut Down it's GSM business. Official date of shut down is 30th November. All customers will get porting code from company."
 
He also asked the channel partners not to do any swapping for SIM cards or any enterprise resources billing. "If somebody has e-recharge (ER) or PRC balance then he has to finish at his own level, company doesn't have any responsibility now. All pending claims of distributors will be settle down and company will do RTGS in their bank account," Mr Singh has apparently said in his communication.
 
Our mails sent to RCom officials as well as SEBI, TRAI and DoT remained unanswered till writing this story. We will incorporate their response as and when we receive it.

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