Reliance Communications that is aiming for 200 million
subscribers is open to acquisitions in Indian mobile market.
Massive technology invention and innovation have resulted
in significant competitive atmosphere in the telecom industry. Product
life-cycle and upgrade cycle has been reduced drastically since several firms
are coming out with new types of products and services within a short span of
time, Reliance Communications CMD Anil Ambani said in its annual report for
As a result, hectic merger and acquisition activities to
consolidate the market share would be new buzz in the market place. We are open
to new acquisitions and opportunities to consolidate,” Ambani added.
Consolidation in the Indian wireless sector is
inevitable, subject to relaxation of restrictions imposed by the regulator.
These include restrictions on a single promoter owning not more than 10 per
cent in another licensee within a telecom circle and a TRAI’s recommendation
that in case of merger or acquisition, the resulting entity may retain only one
block of spectrum.
Reliance Communications never took over any mobile
operator in India. Last year, Reliance bought Digicable, India’s largest cable
TV service provider. It also made a futile effort to tie up with MTN of Africa.
Till now, Reliance Communications’ main acquisitions were abroad. Flag, Vanco
and Yipes Systems were some of the few overseas acquisitions.
On the other hand, Vodafone, Bharti Airtel, Idea Cellular
and Tata Teleservices grew through merger and acquisitions.
The government is keen on relaxing M&A norms to
assist new telecom service providers who are facing tough competition in the
New telecom operators are not doing well financially.
Unitech Wireless posted revenues of INR 5389 million during the June quarter
2011, Sistema Shyam Teleservices (INR 2791 million), Videocon
Telecommunications (INR 1955 million) and Loop Mobile (INR 1861 million).
Market opportunities drove Reliance Communications’ total
income to Rs 23,108 crore ($5,182 million) during fiscal 2010-11 from Rs 22,132
crore ($4,903 million) in previous financial year.
Net profit declined to Rs 1,346 crore ($302 million) from
Rs 4,655 crore ($1,031 million) in previous financial year.
Reliance Communications is aiming to capitalize on the
growth opportunities in the converged telecom market supported by its
integrated infrastructure and strong focus on quality of services.
The company is betting big on data services. In CDMA,
high speed data coverage has expanded from 65 to 518 towns in the last 6 months
and 3G services are being provided in 330 towns already. RCOM also offers 1X
data in CDMA in over 20,000 towns
Value added services (VAS) will be yet another growth
area for Reliance Communications. The market share of data enabled phones in
new shipments has increased by over 50 percent. The market share of smart
phones is growing at a faster rate.
Keeping in mind convergence of devices and user access
modes, Reliance began its converged Value Added Services approach from last
By Baburajan K