Indian telco to leave enterprise business to address debt burden
Reliance Communications will completely step back from the telecoms industry, selling off the enterprise business it was left with following its recent departure from the mobile space.
RCom chairman Anil Ambani made the announcement to shareholders at the company’s AGM, India’s Business Standard reported on Tuesday.
"We have decided that we will not proceed in this sector," the paper quoted Ambani as saying. "As we have moved out of the mobile sector, we will monetise at an appropriate stage our enterprise business. Reliance Realty will be the engine of growth for the future of this company."
The move should enable RCom to tackle its hefty debt pile, which according to the paper stands at more than 400 billion rupees (€4.7 billion).
Once a big name in Indian telecoms, RCom, like many of its peers, struggled to compete in a cut-throat market that emerged at least in part as a result of the entrance of Reliance Jio Infocomm – the brainchild of Anil Ambani’s brother Mukesh – in 2016.
Following a failed attempt to merge with Aircel, RCom conceded defeat almost a year ago when it announced its decision to leave the consumer sector and focus solely on the enterprise and carrier markets. Part of that restructuring plan saw it broker a deal to sell fibre, spectrum and other assets to Reliance Jio.
According to the Business Standard, Ambani sees recent events in the Indian telecom sector as a "creative destruction" and warned that the market is moving towards a duopoly, with a risk of a monopoly emerging in future.