Reliance Jio rings in the new, setting the tone for others
As Mukesh Ambani gave his speech at the event, Sunil Mittal, once the cynosure of all eyes, sat impassively, watching him
New Delhi: Like technology, leadership in telecom is in a state of flux. Czar comes, czar goes. It was very much at play at the India Mobile Congress, the country’s premier telecom event.
Both India’s original telecom czar Sunil Mittal, the man who ushered in the telecom revolution in the country, and the new market pace setter and arch rival Mukesh Ambani were present, but it was the latter who stole the limelight.
As the inaugural session ended and Ambani, chairman of Reliance Jio Infocomm Ltd, dashed to the exit, Mittal was seen rushing after him even as a throng of journalists and photographers surrounded the man who had triggered the data revolution.
Ambani, India’s richest man, has used profits from Reliance Industries Ltd’s refining business to pump in more than $30 billion to upend the telecom industry, forcing smaller telcos to exit and Vodafone India Ltd and Idea Cellular Ltd into a complex merger that has pushed Mittal’s Bharti Airtel Ltd to the No. 2 position.
What’s more, Reliance Jio may overtake Vodafone Idea and Airtel to become India’s largest telecom operator by the end of 2018, if the strong pace of subscriber addition continues.
With the changing fortunes, the limelight has also shifted. At the mobile congress, Ambani moved from one stall to another in the company of two Union ministers—Ravi Shankar Prasad and Manoj Sinha—followed by an eager crowd. Mittal, whose company reported a 65% drop in quarterly profit later in the day, was mostly in the shadows.
In the morning, Mittal and Ambani, along with Kumar Mangalam Birla, took the stage with the ministers for the inaugural session of the second edition of India Mobile Congress that was centred around showcasing the country’s advances in artificial intelligence, virtual reality, Internet of Things, etc. While Mittal was seated between telecom secretary Aruna Sundarajan and Hardeep Puri, the minister for urban development, Ambani was flanked by Prasad on his right and Birla on his left.
“I am personally excited about the promise and prospect of bringing Digital Revolution to India’s villages… to agriculture and rural enterprises… to women… and to marginalized communities everywhere,” Ambani said in his speech. “I am equally excited about connecting millions of small shopkeepers in India. The Digital Connectivity Revolution can transform rural India most comprehensively. In the past eight months alone… as many as 50 million villagers have got affordable smartphones.”
All this while, Mittal, once the cynosure of all eyes, sat impassively, watching Ambani. He had seen it all through the opening decade of this century as he rang in the telecom revolution.
But the old order changes and now with Jio, Ambani has forced the telecom industry into a fierce phase of consolidation, with only four operators left in the fray for an annual business of ₹1.61 trillion in 2017. In this era, voice calls are free and generate little by way of revenues, while data tariffs are at an all-time low. Telcos are being forced to invest in ramping up their infrastructure, putting company balance sheets under severe strain. Vodafone India chief executive Balesh Sharma admitted on Thursday that the “whole industry is bleeding” and everybody was looking to get their “costs in order”.
Airtel itself is going through a financial slump . Its net profit for the quarter ended 30 September declined to ₹119 crore, while revenue dropped 6.2%.
So, when Mittal rushed towards Ambani, he may have been looking for a closure, a brake on the ruinous price wars that Ambani has unleashed on the industry.
He sought time to meet Ambani. “Tum bolo na kab milna hai. Abhi aa jao... Main Arun ji (unidentified) ko milne ja raha hoon... If you want, I can come wherever you want,” Ambani said and left.
A meeting between the two titans of Indian industry could well be on the cards, but whether that will help Mittal in this mega battle of the giants remains to be seen.
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