Reliance Communications

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Reliance Communications Ltd
Public
Traded as
Industry Telecommunication
Founded 27 December 2002; 15 years ago (27 December 2002)
Founder Dhirubhai Ambani
Headquarters DAKC, Kopar Khairane, Navi Mumbai, Maharashtra, India
Key people
Anil Ambani (Chairman)
Products
Revenue 22,113 crore (US$3.3 billion)[1] (2017)
7,017 crore (US$1.0 billion)[1] (2017)
703 crore (US$100 million)[1] (2017)
Owners Reliance ADAG(90%)
SSTL (10%)
Members 12.10 million (31 January 2018[2])
Number of employees
7,257[1] (2017)
Subsidiaries
Website www.rcom.co.in

Reliance Communications (stylised as RCom) is a telecommunication company headquartered in Navi Mumbai, India. A subsidiary of Reliance Group, its services include GSM (voice; 2G, 3G and 4G), fixed-line broadband and voice, and direct-to-home satellite television (depending upon area in India). The company ended its 2G and 3G service (including all voice service), offering only 4G data service, on 29 December 2017 as a result of debt and a failed merger with Aircel.[3][4]

In November 2017, the company closed its wireless business. The following month, it agreed to sell its wireless assets to Reliance Jio Infocomm in an all-cash deal estimated at Rs 24,000 crore (Rs 240 billion). This would help pare its debt, which is about Rs 45,000 crore (Rs 450 billion).[5]

History[edit]

Reliance Communications was founded in India in 2002[6] with the introduction of its nationwide CDMA2000 service. The company introduced its GSM service in 2008, and began using MIMO technology in 2011 to improve the quality of its 3G service (providing a data rate of up to 28 Mbit/s).[7][unreliable source?]

In the 2010 spectrum auction, Reliance obtained 3G spectrum in three cities for 58,642.9 million.[8] The company reduced the price of its 3G service by 61 percent in May 2012.[9] Reliance joined Lenovo to introduced their co-branded Android smartphones in India the following year.[10] The company ended its CDMA operations in 2016, and migrated subscribers to its GSM and LTE networks by September of that year.[11][12]

Acquisition of MTS India[edit]

On 14 January 2016, Reliance announced that it had acquired Sistema Shyam TeleServices Limited (SSTL, doing business as MTS India) in an all-stock deal in which SSTL received a 10-percent stake in Reliance after paying its existing debt. Reliance would assume responsibility for installments which MTS owed the government for spectrum purchases, amounting to 392 crore annually for 10 years. As a result of the deal, Reliance acquired MTS India's subscribers and SSTL's spectrum in the 850-MHz band.[13]

The merger was approved by the Competition Commission of India (CCI) in February 2016.[14] The SEBI cleared the deal by March, and SSTL shareholders approved the merger on 18 March.[15] By mid-August, it was approved by tax authorities and the shareholders and creditors of Reliance and SSTL.[16] The merger was approved by the Rajasthan High Court on 30 September 2016[17] and the Bombay High Court on 7 October.[18] In April 2017, Reliance laid off 600 employees in preparation for mergers with MTS and Aircel.[19] Final approval (from the Department of Telecommunications) was given on 20 October 2017,[20][21] and on 31 October Reliance announced that it had completed the merger.[22][23]

Attempted merger with Aircel[edit]

On 14 September 2016, Reliance and Maxis Communications (owners of Aircel) announced that they would merge their mobile networks. The deal, the largest consolidation in Indian telecommunication history, would create the fourth-largest mobile network operator in the country in subscribers and revenue. Reliance and Maxis would each hold a 50-percent stake in the merged entity, with equal representation on its board of directors and committees. Reliance would continue to operate in the enterprise segment and data-center businesses as a standalone company.[24][25]

The company announced on 15 March 2017 that it had received approval from the SEBI, BSE, and NSE.[26][27][28] The deal was approved by the CCI on 20 March.[29][30] Aircel and Reliance shareholders approved the merger on 22 and 24 April 2017, respectively,[31] and it was expected to be completed by mid-2017.[32]

However, on 1 October Reliance announced that it is had allowed the merger agreement to lapse.[33] The deal, which was expected to help the company pare 25,000 crore of debt, was cancelled due to delays by entrenched competition.[34] Reliance was looking at other options to meet their obligations under the SDR agreement and avoid insolvency proceedings by banks.[35] Due to the failed Aircel merger, the company announced to employees in the wireless and DTH businesses on 25 October 2017 that they would be redundant effective 30 November. On 29 December 2017, Reliance discontinued voice services in India and would provide only 4G data service.

Ultraband[edit]

RCom launched its Ultraband service, offering internet speeds of up to 1 Gbit/s, in portions of Mumbai and Navi Mumbai in April 2016.[36]

Subsidiaries[edit]

Reliance Telecom Limited (RTL) operates in Madhya Pradesh, West Bengal, Himachal Pradesh, Odisha, Bihar, Assam and northeastern India, and first offered GSM in January 1997.[37] Reliance Tech Services is the IT service wing of Reliance Communications. It provides IT consulting, business outsourcing and software development for Reliance Communications and other Reliance Group companies. Reliance Globalcom owns the Fiber-Optic Link Around the Globe undersea cable system, and RIDC provides Internet data centre (IDC) service in Mumbai, Bangalore, Hyderabad and Chennai. Reliance Communications also acquired FLAG Telecom, the Yipes Ethernet service, Digicable, and Vanco.

Reliance Digital TV[edit]

Reliance Digital TV is a direct-to-home (DTH) television provider.

Reliance Infratel[edit]

Reliance Infratel manages the company's mobile towers and related infrastructure. Reliance Communications owned a 96-percent stake in the company, and the rest was held by Quantum (M), NSR Partners, Galleon, HSBC Daisy Investment (Mauritius), Drawbridge Towers and Investment Partners B (Mauritius); Investment Partners B invested $287 million in 2007.[38]

Reliance Communications announced that it signed an agreement with Brookfield Infrastructure Group to sell a 51-percent stake in Reliance Infratel for 11,000 crore (US$1.6 billion), and will use the income to reduce its debt. It will retain a 49-percent stake, and the minority partners will leave.[39][40]

Global Cloud Xchange[edit]

Global Cloud Xchange (GCX) has a portfolio of customized solutions for carriers, enterprises and new media companies across its 67,000-kilometre (42,000 mi) undersea cable system, integrated with Reliance Communications’ 200,000 kilometres (120,000 mi) of domestic fiber-optic cable.

Reliance Global Call[edit]

Reliance Global Call offers international calling in India, the US, Canada, Australia, the UK, Singapore, Hong Kong, New Zealand, Singapore, France, Belgium, Austria, Spain, Ireland and the Netherlands.

References[edit]

  1. ^ a b c d "Reliance Communications Financial Annual Results For 2012 - 2013" (PDF). Rcom.co.in. Retrieved 16 January 2012. 
  2. ^ "Press release on Telecom Subscription Data as on 31st January, 2018". Telecom Regulatory Authority of India (TRAI). Retrieved 24 June 2018. 
  3. ^ "Reliance Communications to shut voice calls from next month". The Economic Times. 4 November 2017. Retrieved 29 November 2017. 
  4. ^ "Debt ridden Reliance Communication to shut voice calls from December 1". The Times of India. 4 November 2017. Retrieved 29 November 2017. 
  5. ^ Kalyan, Parbat (9 April 2018). "Sistema JSFC reluctant to buy RCom's subsea cable arm GCX". Retrieved 13 July 2018. 
  6. ^ "Reliance set to revolutionise mobile services". Rediff. 27 December 2002. Retrieved 29 November 2017. 
  7. ^ "Reliance Improved their 3G with MIMO Technology". Teletechnology of India. 22 August 2011. Retrieved 5 October 2013. [dead link]
  8. ^ "RCom launches 3G services in 3 cities". The Hindu. Chennai, India. 14 December 2010. [dead link]
  9. ^ "RCom slashes 3G tariff by 61%". The Times of India. 25 May 2012. Retrieved 25 May 2012. 
  10. ^ "RCom partners Lenovo to launch sub-Rs 8,000 smartphone". The Hindu. 31 January 2013. [dead link]
  11. ^ "RCom kicks off migration process; to upgrade CDMA subscribers to 4G LTE network". 2016-04-02. Retrieved 2016-09-14. 
  12. ^ "Reliance Communications Posts Nearly 6% Rise In Q1 Profit". NDTV. Retrieved 2016-09-14. 
  13. ^ "Reliance Communications acquires Sistema's MTS India in all-stock deal". www.businesstoday.in. Retrieved 2016-09-06. 
  14. ^ "Reliance Communications Gets CCI Approval to Acquire MTS". Retrieved 2016-09-06. 
  15. ^ "Sistema Shyam shareholders approve merger with Reliance Communications". Retrieved 2016-09-06. 
  16. ^ "DoT's approval for SSTL-RCOM merger likely in Q4: Sistema - The Economic Times". Retrieved 2016-09-06. 
  17. ^ India, Press Trust of (30 September 2016). "RCom gets Rajasthan HC approval for Sistema acquisition". Business Standard. Retrieved 1 October 2016. 
  18. ^ "Reliance Communication gets Bombay HC approval for Sistema acquisition - The Economic Times". The Economic Times. Retrieved 2016-10-08. 
  19. ^ "Pink slips for 600 as Reliance Communications trims fat". The Economic Times. Retrieved 5 May 2017. 
  20. ^ "Telecom department approves RCom-MTS merger - ET Telecom". ETTelecom.com. Retrieved 18 November 2017. 
  21. ^ "RCom-Sistema Shyam merger gets DoT approval". The Economic Times. 2017-10-23. Retrieved 2017-10-24. 
  22. ^ "Reliance Communications Completes Merger With MTS". NDTV. Retrieved 18 November 2017. 
  23. ^ "Reliance Communications completes merger with MTS". Zee News. 31 October 2017. Retrieved 18 November 2017. 
  24. ^ "RCom, Aircel announce merger; create fourth largest telco in India - Times of India". Retrieved 2016-09-14. 
  25. ^ Pandey, Piyush (2016-09-14). "RCom-Aircel merger a strong challenger to Idea Cellular". The Hindu. ISSN 0971-751X. Retrieved 2016-09-14. 
  26. ^ "Reliance Communications Gets SEBI, Exchanges Nod For Aircel Merger". NDTV. Retrieved 20 March 2017. 
  27. ^ India, Press Trust of (15 March 2017). "Reliance Communications gets Sebi nod for merger with Aircel". Business Standard India. Retrieved 20 March 2017. 
  28. ^ Bureau, Our (15 March 2017). "RCom-Aircel merger gets SEBI nod". The Hindu Business Line. Retrieved 20 March 2017. 
  29. ^ Feeds, IANS (20 March 2017). "RCOM gets CCI approval for Aircel merger". India.com. Retrieved 20 March 2017. 
  30. ^ Lead, Telecom (20 March 2017). "RCOM-Aircel merger deal gets CCI approval". TelecomLead. Retrieved 20 March 2017. 
  31. ^ "Anil Ambani-driven RCom, Aircel shareholders approve merger - ET Telecom". ETTelecom.com. Retrieved 5 May 2017. 
  32. ^ "RCom says Aircel merger to be completed by 2017 middle, MTS merger by March". Telecom Talk. Retrieved 15 February 2017. 
  33. ^ "RCom abandons mobile business merger with rival Aircel". Financial Times. Retrieved 18 November 2017. 
  34. ^ Sengupta, Devina (2017-10-02). "RCom calls off Aircel merger; blames legal uncertainties, policy directives for delay". The Economic Times. Retrieved 2017-10-02. 
  35. ^ Raj, Amrit (2017-10-03). "RCom readies for fire sale of its assets to pare debt, as Aircel merger fails". Livemint. Retrieved 2017-10-02. 
  36. ^ "RCom launches Ultraband with 1 Gigabit per sec speed in Mumbai". 25 April 2016. Retrieved 19 July 2018. 
  37. ^ "Telecom Investment: At its Peak". Telecom & Networking Communications Today. 3 December 2009. Archived from the original on 28 January 2010. Retrieved 6 October 2013. 
  38. ^ "Brookfield set to buy majority stake in Reliance Communication towers; Anil Ambani to stay on as minority partner - The Economic Times". The Economic Times. Retrieved 14 October 2016. 
  39. ^ Pandey, Piyush (14 October 2016). "RCom to sell 51 p.c. in tower assets to Brookfield for Rs 11,000 crore". The Hindu. Retrieved 14 October 2016. 
  40. ^ "RCOM plans to sell tower assets to Brookfield for Rs 11,000 crore". The Indian Express. 14 October 2016. Retrieved 14 October 2016. 

External links[edit]