Anil Forays Into The Gsm Business !

[SexyGurl 0]

Anil commits Rs 500 cr for Reliance GSM

Kausik Datta in Mumbai | July 27, 2005 02:02 IST

Anil Ambani has committed an investment of Rs 500 crore (Rs 5 billion) in Reliance Telecom Ltd, the GSM (global system for mobile communication) arm of his ADAE group.

Relaince Telecom has two brands - Smart for prepaid and Reliance Mobile for post-paid customers.

Confirming the development, RTL sources said Ambani was instrumental in Reliance group's diversification in telecom eight years ago but he chose to stay away from the management of the company so far.

He took over as the chairman of the company on Saturday. The other members of the board are S P Shukla, Satish Sheth and B D Khurana.

Ambani's proposed investment in RTL follows his commitment to invest Rs 2,300 crore (Rs 23 billion) in Reliance Capital and Rs 1,500 crore (Rs 15 billion) in Reliance Energy, the financial services firm and power utility of his group, respectively.

So his total investment commitment to the group stands at Rs 4,300 crore (Rs 43 billion) now. RTL has a network spread across 13 states and a subscriber base of 1.5 million.

After taking over as Reliance Infocomm chairman, Anil Ambani had said he wanted to build India's most profitable GSM company over the next few years.e sources said RTL's revenue would go up to Rs 700 crore (Rs 7 billion) at the end of this financial year from last year's Rs 453 crore (Rs 4.53 billion).

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Sounds to me the beginning of the undoing of Infocomm ? --- wouldn't this 500 crore have yielded better returns, if invested in Infocomm. ??

Infocomm was the only big thing Anil got, which could have been the flagship company of his group. RTL, REL, Reliance capital are rather puny to offer a chair big enough for Anil to sit into.

But yeah, Infocomm will, for long continue to be seen as "the company that Mukesh built".

I pity Anil .... and would hate to be in his shoes. It is so much happiness to look at the walls of the house you live in, with the thought --> "I built those walls, brick by brick, with my initiative, hard work. This is mine. I deserve it"

But for Anil, Infocomm means -- "this is not mine. I opposed this being made. I'll prove it, by enuring that Infocomm had no chance to succeed, in the first place".

Too bad a thing, emotionally, for Anil. Bad for Mukesh too, but much less --> Mukesh: "Hate to see what I built with so much effort, being now ruthlessly being cut and broken. ... But, I have the guts to build, something like Infocomm again".

Wait to see the building of an Indian Mcdonald's or Walmart, for the Mukesh group.

The guy needs and has the capability to get a foothold in the retails markets of India.

Edited August 10, 2005 by Arun

[vb86 0]

these guys r too confused. 1st netway followed by dth and now cdma followed by gsm. i know they already have a footprint in gsm but god knows what they are upto now. How will they run both of these simultaneously.

[anujit 0]

RIM was one of the key reasons why Anil let Mukesh take RIL - since RIM's "potential growth" was valued very high.

Would be highly highly stupid of him to run that potential into the ground and start from scratch with RTL. This is meaningless speculation.

But to speculate a lil more... perhaps he would like to build RTL up a lil more and sell it of to Hutch! Hows that!

[SexyGurl 0]

Yeah, selling to hutch (or maybe idea) would make natural sense.

But 500 crores ... looks to me much more than "a lil more"

Edited July 27, 2005 by bhutes

[anujit 0]

Rs. 500 crore = US$ 111 million

Crappy BPL sold = US$ 1 billion.

Do the math. Its a teeny tiny investment.

Edited July 27, 2005 by anujit

[Puneet 0]

Crappy BPL sold = US$ 1 billion.

Do the math. Its a teeny tiny investment.

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Crappy BPL had Mumbai (is number 2 in Mumbai, used to be number 1 till a few years ago), whereas RTL has MP, HP, Bihar, Orissa and NE. I doubt it will be able to fetch that much.

[SexyGurl 0]

Crappy BPL also has 2.6 million subscribers.

RTL has 1.3 million.

So, just that would reduce the valuation to $ 500 million.

But RTL's ARPU has been low-EST in the industry. Believe me, it's true --> just around 210 per month !!

Anil should be happy if RTL sells at an enterprise value of 350 to 400 million (without his $111 million i.e. 500 crore input).

But anyways, I don't think he's "trying to fatten up the pig with potatoes, before he sells"... Looks like he is trying to make "India's most PROFITABLE GSM company".

The simplest way to boost RTL's ARPU is to get rid of ALL subscribers, and ANIL buys an RTL connection .. (being it's only subscriber). Probably RTL's ARPU would then be over 1 lac (A world record for any GSM company around the world)

[@ksh@T 20]

guys as far as i think ...that they want to make both GSM and CDMA in their arms......Lets c what happens next as i think too mr Lil Ambani is not giving much attention to Infocomm......

And also it has got huge funds from, parent (RIL) thats why he is not investing in it..

desijallad

[anujit 0]

You're talking about facts and figures before the 500 crore investment.

Let him fatten the pig first. :'(

Although I once again say it is HIGHLY UNLIKELY that he'll sell. Theres a reason why the Reliances, Tatas, Wadias and Birlas don't sell of their smaller businesses. Business fundamentals/laws has little to do with it. Although globally this (like GE, IBM selling out) is changing fast!

But I do like all the speculation here.

Pssst: Did you guys hear that senior Verzion officials were seen lurking around the RIM compound! (go bhutes go!)

Edited July 27, 2005 by anujit

[abhay 0]

1) if anil wants to loose eveything he has and go back to the chawl where he lived he will let infocomm die

2) infocomm (cdma) and gsm cannot practically work together because its like the same company is saying that take CDMA enabled phones they are a lot more better than GSM and the same company is again say take GSM phones because they are cheaper lol its very stupid both technologies contaradict each other and cant work together :'(

3) i say reliance infocomm has so much strength left it in that it will be better then all of RIL in years to come look @ it this way

some 3- 5 peaople in india out of 100 own phones

see the market potential even if arpu is 100 including all services ie

1 mbit internet + cable tv + mobile + land line + all kinds of telecom services in the world(best ones) then @ current suscriber numbers a monthly turn over of reliance infocomm is RS 100 cr now do the math if the suscriber numbers to reliance increases multi folds which is more than possible seeing the growth in the market

moral of the story :- nobody is a fool to loose such a profitable buissness just because his brother started it !!!!

[manishrajpal 0]

hi guys

does anyone know if reliance will enter the gsm market in maharashtra

as of right now essar who originally owned hutch and now have taken over bpl .Thus there is one licence available in mumbai that might be surrendered by them and if i am not wrong reliance would definately like to bag that...

[SexyGurl 0]

Should we rename RIMWEB.COM as RTLWEB.COM ?

Anil takes the GSM call, to pump in Rs 500 cr

THE ECONOMIC TIMES

Kalyan Parbat

KOLKATA

It's not yet official, the buzz is palpable. Reliance Telecom (RTL), the relatively low-profile GSM arm of Anil Ambani-controlled Anil Dhirubhai Ambani Enterprises (ADAE), is preparing to emerge from the shadow of CDMA heavyweight Reliance Infocomm.

The stage appears to be set for Reliance Telecom to expand its cellular footprint beyond its seven circles in the backdrop of promoter ADAE's decision to pump in some Rs 500 crore to expand the GSM business, top sources close to the developments told ET.

Of the four telecom firms (Reliance Infocomm, Flag Telecom, Reliance Comm Infrastructure and Reliance Telecom) controlled by Anil Ambani, RTL is the only one in which lead promoter ADAE has a direct 65% majority holding. The strategic decision to beef up RTL aims to harness the full potential of ADAE's telecom businesses that combines mobile services on both CDMA and GSM platforms.

It is not very clear at this stage, whether RTL will apply for fresh unified access service licences (UASL) or go for strategic acquisitions in the GSM arena, which has lately seen a bunch of mega deals in perhaps the final phase of big-ticket cellular consolidation.

“Given that Reliance Infocomm has already emerged as a dominant player in the telecom space, Anil Ambani is working fast to strengthen the GSM arm after RTL fell into his lap as part of the Ambani family settlement,” top sources close to ADAE told ET.

With the strengthening of the GSM arm, company circles expect that in the immediate analysis, “Reliance Telecom will target a 54% jump in its gross annual revenue to Rs 700 crore in financial year '05-06 from Rs 453 crore in '04-05.” The company has registered a 22% jump in GSM subscriber growth during the April-June '05 quarter, which is higher than the 9% national cellular industry growth rate during the first quarter of '05-06.

At present, RTL's cellular user base exceeds 1.5m across its seven-circle footprint encompassing 11 states - Orissa, Bihar, Jharkhand, West Bengal, Sikkim, Madhya Pradesh, Chattisgarh, Assam, Meghalaya, North-East and Himachal Pradesh.

The latest developments assume significance since Mr Ambani was instrumental in the Reliance group diversifying into the telecom space back in 1997. In a recent webcast address to Reliance Infocomm employees, he is understood to have said “in some ways, life has come a full circle...I vividly recall the time, a decade ago, when we at Reliance, bid for telecom licences across the country,” top RTL sources said.

Copyright © 2005, Bennett, Coleman & Co. Limited. All Rights Reserved.

Source: The Economic Times

[Harshad 1]

hi guys

does anyone know if reliance will enter the gsm market  in maharashtra

as of right now essar who originally owned  hutch and now have taken over bpl  .Thus there is one licence available in mumbai that might be surrendered by them and if i am not wrong reliance would definately like to bag that...

37285[/snapback]

reliance entering mumbai with their gsm service seems highly unlikely. How can they afford to give competition to their existing venture out here ? Na. I don;t think thats possible. It has to be either IDEA or SPICE. I would love the latter to come, since its damn cheap.

[city02 63]

Should we rename RIMWEB.COM as RTLWEB.COM ?

Nope, it should be RICweb.com since FWP, FLP, BB, NW, etc are not part of RIM...

[abc123 0]

If u people are saying that there will be one licence avilable in mumbai of BPL........ Now a days any operator can take a licence if they want by paying the Entry Fee. Fee will be same as the fourth operator has paid... similiar condition which was applicale for Reliance and Tata when they shifted to full mobility. so if Idea or Spice wana enter mumbai they can do it at any time by paying the fee there is no need for waiting till some operator wana sell there Licence.......... thats policy now a days

[linuxguy 0]

This is stupid. Anil should sell off the infrastructure to his competitors meanwhile setup CDMA network in the city and slowly transition all its customers to CDMA. It makes more sense than entering Mumbai with the aim of setting up the GSM network. Whats he going to compete with? RIM CDMA?? Besides he will have more coverage!