Indian operator will call time on its mobile operations at the end of November, and will also walk away from DTH business, according to media reports
India was awash with rumours around the future of Reliance Communications’ mobile and TV businesses on Wednesday, with one news outlet claiming that the telco will close down the former within a month due to market competition.
RCom has told staff at its wireless unit that their last day at work will be 30 November, according to the Economic Times, which cited an audio recording of Gurdeep Singh, executive director of Reliance Telecom speaking to employees.
"We need to call it a day on our wireless business," Singh reportedly told staff, citing, amongst other things, the competitive havoc wreaked by Reliance Jio Infocomm’s cheap – and even free – voice and data services, which came to market last year.
"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," the paper quoted Singh as saying.
It admitted that it had been unable to independently verify the authenticity of the recording though, and said the RCom had declined comment.
RCom’s mobile business was also hit hard by its failure to merge with rival Aircel and the time taken for it to finalise the acquisition of Sistema Shyam Teleservices Ltd (SSTL). RCom and Aircel called off their 50:50 JV earlier this month due to delays in the regulatory approvals process, but on Monday RCom announced that it had secured the approval of the Department of Telecommunications (DoT) for its SSTL takeover and said it would likely close that transaction in the first week of November. It appears the SSTL deal comes as too little too late for the ailing telco though.
Singh said RCom will look to merge its ILD voice, consumer voice and postpaid 4G dongle operations into its enterprise unit, provided it is profitable to do so, but will close down all over parts of its business, with the exception of its towers unit, which has deals in place with other operators, including Reliance Jio.
He added that RCom’s DTH television licence expires on 21 November and it does not plan to renew it, thereby exiting the TV space.
The Business Standard quoted an RCom spokesperson as confirming that part of the story. The spokesperson said DTH is a non-core area for RCom and it is working with India’s other three DTH providers on a migration plan for customers.
Last week CNBC-TV18 reported that Bharti Airtel and Tata are holding talks with a view to merging their DTH businesses, a move that would put them ahead of current market leader Dish TV. The rumour emerged just days after Bharti announced the acquisition of Tata’s mobile business, a deal that will mark the latter’s exit from the wireless market.
The RCom TV shutdown comes after the company failed to find a buyer for its TV assets, the Business Standard said.
In a filing with the Bombay Stock Exchange, RCom said the exchange has sought clarification on the Business Standard piece, but made no mention of the wider report in the Economic Times.
As it stands, RCom is India’s seventh largest mobile operator with a market share of just 6.85% at the end of July, according to figures from the Telecom Regulatory Authority of India (TRAI). The merger with Aircel would have put the resulting entity into fourth place, ahead of Reliance Jio.