Reliance Communications (Rcom) is believed to be closing down major parts of its wireless business in the next 30 days, blaming among other factors, the “creative destruction” brought in by new entrant Reliance Jio’s free voice and cheap data services, and has told its employees that their last date of employment will be November 30.
"We stand at a situation where we need to call it a day on our wireless business and this would bring the curtains down on our wireless business 30 days from now. And as a result, we tried whatever means to sustain and put oxygen in the business but we will not be able to sustain the business beyond 30 days from now," Gurdeep Singh, executive director of Reliance Telecom, who was also the CEO and co-CEO of the mobility business, is believed to have told employees Tuesday. Also read Reliance jio best latest new unlimited internet 4g plans 2017.
“Segment wise - IL D 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. We have published in newspapers that as our DTH license is expiring on 21st of November and we are not renewing license. So that will also mark our exit from DTH business. So that is restructuring of overall wireless and consumer business,” Singh added.
The tower business will remain operational since it is bringing in business with its tenacities with Jio and other private operators, he said. RCom is in talks to sell its stake in its tower unit to Canada's Brookfield.
People familiar with the matter said that the company is planning to close down its 2G operations, weed out its low average revenue per user (ARPU) generating subscribers and focus on only the profitable parts of the 3G and 4G services - which could be housed under the enterprise business - in an effort to cut losses. You may also like our previous post on Reliance jio tariff rate hike will open scope to price hike for Airtel, Idea,vodafone
Singh listed out the challenges the business has faced starting from giving up CDMA business that forced them to let go of customers, long time taken to merge Sistema Shyam Tele services with itself, and finally the proposed merger with Aircel that was canned because of many reasons including court cases and Supreme Court's refusing to give a go ahead till Aircel is 'exonerated'.
The 'creative destructive' of new entrant Reliance Jio Infocomm was also a factor behind this call since it 'crippled' many players and eroded an industry that got its revenues largely from the voice business, Singh said. Jio since its launch has made voice free for its customers."All of us need to move on. 30th November is our last working day," said Singh, who has been with the telco for the last six years.
The Ambani company is undergoing a strategic debt restructuring program and the telco’s merger with Aircel combined with its stake sale to Brookfield were crucial to its plans to shear some Rs 25,000 crore of its Rs47,000 crore debt. With the first deal off, and the second one being renegotiated downwards, the operator had earlier said it has chalked out an alternate plan involving sale of tower, fibre, spectrum, and real estate assets, which could generate over Rs 25,000 crore that could be used to repay lenders. Also read Reliance Jio's 399 plan now offers Unlimited calling and internet data with 70 days Validity(New plan) 2017.
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| Reliance communications may shut down wireless bussiness by November 2017 |
"We stand at a situation where we need to call it a day on our wireless business and this would bring the curtains down on our wireless business 30 days from now. And as a result, we tried whatever means to sustain and put oxygen in the business but we will not be able to sustain the business beyond 30 days from now," Gurdeep Singh, executive director of Reliance Telecom, who was also the CEO and co-CEO of the mobility business, is believed to have told employees Tuesday. Also read Reliance jio best latest new unlimited internet 4g plans 2017.
“Segment wise - IL D 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. We have published in newspapers that as our DTH license is expiring on 21st of November and we are not renewing license. So that will also mark our exit from DTH business. So that is restructuring of overall wireless and consumer business,” Singh added.
The tower business will remain operational since it is bringing in business with its tenacities with Jio and other private operators, he said. RCom is in talks to sell its stake in its tower unit to Canada's Brookfield.
People familiar with the matter said that the company is planning to close down its 2G operations, weed out its low average revenue per user (ARPU) generating subscribers and focus on only the profitable parts of the 3G and 4G services - which could be housed under the enterprise business - in an effort to cut losses. You may also like our previous post on Reliance jio tariff rate hike will open scope to price hike for Airtel, Idea,vodafone
Singh listed out the challenges the business has faced starting from giving up CDMA business that forced them to let go of customers, long time taken to merge Sistema Shyam Tele services with itself, and finally the proposed merger with Aircel that was canned because of many reasons including court cases and Supreme Court's refusing to give a go ahead till Aircel is 'exonerated'.
The 'creative destructive' of new entrant Reliance Jio Infocomm was also a factor behind this call since it 'crippled' many players and eroded an industry that got its revenues largely from the voice business, Singh said. Jio since its launch has made voice free for its customers."All of us need to move on. 30th November is our last working day," said Singh, who has been with the telco for the last six years.
The Ambani company is undergoing a strategic debt restructuring program and the telco’s merger with Aircel combined with its stake sale to Brookfield were crucial to its plans to shear some Rs 25,000 crore of its Rs47,000 crore debt. With the first deal off, and the second one being renegotiated downwards, the operator had earlier said it has chalked out an alternate plan involving sale of tower, fibre, spectrum, and real estate assets, which could generate over Rs 25,000 crore that could be used to repay lenders. Also read Reliance Jio's 399 plan now offers Unlimited calling and internet data with 70 days Validity(New plan) 2017.
Reliance communications may shut down wireless bussiness by November 2017
Reviewed by Shan Paul
on
October 25, 2017
Rating:
Reviewed by Shan Paul
on
October 25, 2017
Rating:
