RCom mobile future in question - Mobile World Live

RCom mobile future in question

25 OCT 2017

Reliance Communications (RCom) is reportedly planning to shutter major parts of its wireless business in November, due to increased competition in the Indian market and a failed merger bid.

The operator will make the move in the next 30 days, The Economic Times (ET) reported, citing an audio recording of a speech made by Gurdeep Singh, executive director of Reliance Telecom. Singh also serves as CEO of the company’s mobile business.

In the recording,  Singh said RCom is in a position “where we need to call it a day on our wireless business”.

However, statements implying a full shutdown did not fully align with the rest of the article, or other reports on the issue.

ET went onto to cite “people familiar with the matter” who stated RCom was planning to close its 2G operations, weed out its low-ARPU subscribers and focus on only the profitable parts of the 3G and 4G business, which could be transferred to the company’s enterprise unit.

Local publication The Hindu also reported the company had decided to shut down its 2G operations by 30 November and upgrade those customers to 3G and 4G services, citing sources close to the developments.

Indeed, Singh stated the company would migrate its “ILD voice, consumer voice and 4G dongle post paid” to enterprise “as long as it is profitable”.

“But aside from these three, everything else will be shutdown,” he said, adding the company would also not renew its DTH broadcast licence, which expires on 21 November.

Creative destruction
In the recording, Singh blamed RCom’s woes on a number of factors, including “the creative destruction” resulting from Reliance Jio’s entrance into the market and the failure of a proposed merger with Aircel.

“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,” he added.

ET did, however, caution it couldn’t “independently verify the authenticity of the audio recording”, and RCom had not responded to comment requests.

Author

Kavit Majithia

Kavit joined Mobile World Live in May 2015 as Content Editor. He started his journalism career at the Press Association before joining Euromoney’s graduate scheme in April 2010. Read More >>

Read more

Related

Tags