Reliance Communications Chairman Anil Ambani expects consolidation in telecom industry

Telecom Lead India: Reliance Communications expects consolidation in the telecom industry. India will have 5-6 six players in the telecom market.

Recently, Bharti Airtel chairman Sunil Mittal said India will see consolidation soon.

At present, Indian mobile market with around 10 telecom service providers does not make sense to do business. All companies are reeling under pressure to improve profitability and add revenue from non-voice business.

Reliance Communications is also expected to sell part of its stake in its telecom tower business by next year.

“After January 2013, spectrum auctions would be over. By then, there would be a fair amount of visibility on the number of players and their infrastructure requirements,” Reliance Communications Chairman Anil Ambani said at the company’s annual general meeting.

Anil Ambani said there will be an increase in telecom rates in the long term. This, however, would not take away from the freedom of consumers. For the billion Indians, there will be choices, choices and choices. While tariffs will go up, competition will be there.

Two months ago, Sunil Mittal forecast that the industry will be prompted to increase tariff in the wake of the current market conditions.

Ambani said the value of the spectrum we hold is twice that of the current marketcap. The company’s total market capitalization is about Rs 10,351 crore.

Reliance Communications has debt of Rs 35,000 crore. The company expects to reduce its debt significantly by 2013-14. Recently, the company’s efforts to list cable arm in Singapore did not materialize.

Gurdeep Singh, chief executive of Reliance Communications’ wireless business, said it expects data and broadband to drive growth in the future.

The company had set targets like improving competitiveness and capacity utilisation to generate free cash flow.

Recently, Reliance Communications bagged multiple orders worth Rs 150 crore to manage Central and State Government projects across the country. This is a significant development for Reliance Communications the leader in data center market with 550,000 sq.ft of space. Reliance Communications is targeting to retain the lead in data center market by adding more new data centers in India.

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