There are lots of things happening at Anil Ambani’s Reliance Group and most of them are bad. Just a day before, we reported that the company closing down its DTH business Reliance Digital TV. Now it seems Reliance Group is axing a big part of its wireless business under Reliance Communications or ‘popularly called’ RCom.
According to reports surfaced in various media houses including the Economic Times, RCom is preparing to shut down a vast majority of its wireless business in the next 30 days. The company has told its employees that their last date of employment will be 30th November.
“We stand at a situation where we need to call it a day on our wireless business and this would bring the curtains down on our wireless business 30 days from now. And as a result, 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,” as per an audio recording acquired by ET of Gurdeep Singh, executive director of RCom.
“Segment wise – ILD voice, consumer voice and 4G dongle post-paid will be migrated to enterprise as long as it is profitable. But besides these three, everything else will be shut down”, Singh said.
The report stated that the company will shut down its 2G and most probably 3G operations across India. 4G operation and towner business will continue because of sharing and trading with Jio and other telecom operators.
Well, the major blame has to be given to his brother’s company Reliance Jio, which entered the Indian telecom sector with a disruptive tariff. Incumbent telecom operators like Airtel, Vodafone and Idea were also forced to lower their tariff. However, heavy debt hit smaller operators like RCom was not able to match up with this low tariff war. Thus continued losing its existing subscribers and failed to attract new users.
Recently, RCom’s merger with Aircel collapsed due to delays in getting approval from courts and telecom authorities. Currently, the operator is in the process of strategic debt restructuring. Under this banks will not collect interest from the telecom operator till December this year.
Note that, the authenticity of the audio recording is yet to be verified. So take the whole news like a rumour until RCom officially announces it.