Anil rings in the future

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With the twin swords of CDMA and GSM services laid out carefully by his side, Ambani junior has Bharti Mittal worried

“I am eagerly awaiting the mobile number portability (MNP) regime. As soon as I am allowed to switch operators, while retaining my number, I will shift to Reliance Communication (RCOM) for its affordability factor,” says Prashant, who currently owns a mobile connection of a leading GSM player.

Not just Prashant, millions of mobile subscribers in India (reports suggest almost 50% of the 200 million), unhappy with their operators, are willing to switch to other service providers if allowed to retain their number; and RCOM’s aggressive marketing and penetration in the Indian telecom mart over the last year, is fast making it the service provider of choice for many.

Although a late entrant, compared to other GSM players, RCOM’s ambitions were apparent right from day one – and Anil Dhirubhai Ambani has managed to live up to each of those expectations, in legendary Ambani style. Whether in terms of monthly subscriber additions, launch of valued-added services (Money Transfer on Mobiles, Live Mandi Prices) on Reliance phones, or an outstanding financial performance; Reliance Communication has been one of the most dynamic telecom player over the past few years.

Not just that, the company has also earned the tag of being one of the best companies to invest in at the bourses, giving shareholders unprecedented returns of 66%, in the last nine months alone – the best among other telecom peers.

And why not? In a sector dominated by favourite GSM players, RCOM, with its CDMA technology has grown amazingly over the last few years, and is today being considered as the biggest threat to market leader Bharti Airtel’s throne. Though Airtel has already reached the 50 million subscribers mark, RCOM is inching closer by the day with 37.8 million subscribers at the end of October 2007.

According to Chairman, Anil Ambani “RCOM has emerged as the most profitable telecom company in India with Average Revenue Per User amongst the top two and the highest average Minutes Of Usage in the country.” For the quarter ending September 2007, RCOM delivered a magnificent performance with net profits of Rs.1,305 crores, a rise of 87% over the last quarter.

Harit Shah, telecom analyst at Angel Broking credits RCOM’s success to the company’s vast network spread across the country and its strong execution skills. “Small wonder that in just seven months of its full-fledged CDMA launch, RCOM became the top mobile operator in India,” he avers. Clearly, the admiralty levels of the company are undoubtedly at an all time high. When 4Ps B&M quizzed Subrato Das, Head, GSM - IT and Special Projects, Reliance Communications Ltd. about the differentiating plank of the company, he replied, “RCOM has established a pan-India, next generation, integrated (wireless and wireline), convergent (voice, data and video) digital network that is capable of supporting best-of-class services spanning the entire infocomm value chain, covering over 13,000 towns and 5,00,000 villages.”

The pan Indian presence apart, RCOM is also creating a revolution of sorts in the low cost/entry level segment. “We have driven down the entry-level price point for mobile connectivity to a new low with the launch of Classic feature-rich handsets at prices starting from Rs.777,” says an RCOM spokesperson. The company, touted as the dream of Dhirubhai Ambani, has also pioneered the concept of handset bundling in India, a concept which minimises the total cost of ownership for the end consumer.

In addition, over the last few years, RCOM has made efforts to become India’s leading integrated telecommunication service provider, shifting its focus to other areas of like broadband, business internet services and video conferencing. “The company also has a strong presence in the enterprise segment and the long distance business, which is a big positive. Its presence in the global data and bandwidth market also gives it a strong global presence,” elaborates Shah. RCOM has established an impressive enterprise customer base, with over 800 of the top 1,000 Indian enterprises, thus expanding rapidly in the SME market. “RCOM’s leadership position across business segments – wireless, global & enterprise broadband – provides the visibility for continued value creation,” says Subrato. Taking its “integrated” strategy ahead, RCOM has also partnered with Microsoft to provide a highly personalised experience to the consumers through its IPTV (Internet Protocol television) service. “Backed by powerful Microsoft Mediaroom software, IPTV promises to offer our subscribers more choice, control and convenience,” believes Ambani.

Considering that Ambani has now got the DoT nod to additionally launch GSM services, RCOM’s duel with Bharti Airtel is all set to intensify. With the double edged GSM-CDMA sword, the telecom power balance shifting to RCOM is not a distant dream any more. The junior Ambani has already initiated talks with equipment vendors for its GSM roll out at an estimated cost of $5.6 billion. The lines are still open. Edit bureau: Devdeep Singh with inputs from Pawan Chabra

Edit bureau: Devdeep Singh with inputs from Pawan Chabra

An Initiative of IIPM, Malay Chaudhuri and Arindam chaudhuri (Renowned Management Guru and Economist).

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