Reliance Communications has arguably gotten the sharpest end of the Jio stick over the last couple of years, but it seems the misery is finally over as the firm files for bankruptcy.
According to The Times of India, Chairman Anil Ambani has approached the National Company Law Tribunal to file for bankruptcy after a torrid couple of months which capped off a horrendous a couple of years. Although the team thought there might be some salvageable assets in a deal with Reliance Jio, this might prove to be the final chapter of the telco story for Anil.
Over the last couple of months, RCom has been attempting to navigate the red-tape maze to sell spectrum assets to Reliance Jio, though this transaction has been blocked due to no-one tackling responsibilities for debts owed to the Department of Telecommunications. The DoT was not willing to greenlight the deal until it had reassurances, though with RCom not able to pay and Jio not willing to, the deal entered a stalemate.
Of course, the plot thickens when you consider this cash was supposed to help RCom pay off various other debts, including one to Ericsson, which had been attempting to get Ambani arrested and imprisoned over the monies owed. It has all seemingly fizzled out into somewhat of a depressing end for RCom.
15 years ago, however, this would have been far from imaginable. The firm used to be one of the more promising telcos in a relatively lifeless market. India has long been one of the ‘BRIC’ nations, with potential fortunes enough to convince many to make a bet on the market. However, incumbent players were happy with the status quo and India fell behind the rest of the world in the digital rankings. That was until Anil’s brother Mukesh turned up with his new business Reliance Jio.
Reliance Jio changed the rules of the game and offered a disruptive data-driven service which appealed to the Indian consumer. Soon enough millions of Indians were ditching traditional telcos in pursuit of the glories hidden in digital society. RCom did not adapt and is now suffering the consequences of standing still for a decade.
RCom now joins a growing list of casualties in India. With the Vodafone/Idea merged business planning its assault, you have to hope this ‘new’ player will be able to offer some resistance to the Reliance Jio momentum. Although this is an admirable success story, there are a worryingly small number of telcos for such a vast market.