Mumbai: Sandip Das, one of the two managing directors of Reliance Jio Infocomm Ltd, has quit his position in the telecom company and has moved to a mentorship role in Reliance Retail Ltd, even as analysts are concerned about the delay in the roll-out of the fourth generation, or 4G, operations of the Mukesh Ambani-controlled company.

Sanjay Mashruwala, Reliance Jio’s other managing director, will continue to head the network roll-out division of the firm.

An email sent by Reliance Industries Ltd (RIL) chairman Ambani on Tuesday to employees of Reliance Jio and Reliance Retail said, “The LTE (long-term evolution) ecosystem for devices in India is nascent. It will take deep conviction and substantial expertise to launch such LTE device ecosystem. Reliance Retail is pioneering this LTE device ecosystem by building sales and distribution channels including retail stores."

Sandip Das, the email added, “with his vast knowledge of marketing and sales, particularly in telecom, is uniquely placed to mentor this exciting and valuable strategic initiative".

Das’s new role comes just months before a June deadline by when Reliance Jio is required to meet its minimum roll-out obligations pertaining to 2,300 MHz broadband wireless access (BWA) spectrum that it won in a 2010 auction.

The roll-out obligations mandate that Reliance Jio has to cover at least 90% of the licence area in urban places and 50% of the rural area under its licence.

A company executive, who did not wish to be named as he is not authorized to speak to the media, said “since Reliance Jio is planning to use the service, sales, and supply chain backbone of Reliance Retail to sell 4G devices and other telecom products, Das was a greater fit there to kick-start the initiative".

Das’s move, according to a person who works closely with Reliance Jio but is not a company executive, is the first major internal movement by a senior Reliance Jio executive to Reliance Retail, and is part of major ongoing restructuring at Reliance Jio, which has seen several executive roles being shuffled and new hires being brought in.

He did not want to be named.

Das, a sales and marketing veteran, was chief executive of Maxis Communications Ltd for six years prior to joining Reliance Jio. He has also worked as deputy managing director of Hutchinson Essar, later acquired by Vodafone India Ltd.

A mail sent by RIL to Mint on Tuesday cited Das as saying, “I had requested for a move for personal reasons. I am delighted and excited to be invited to join the board of Reliance Retail and mentor the Jio division within Reliance Retail."

A second company executive, aware of the initiatives between Reliance Retail and Reliance Jio, said in terms of device strategy, Reliance Jio plans to sell 4G-enabled handsets and mi-fi (mobile wi-fi) devices such as dongles fitted with a battery pack to provide high-speed wireless Internet access.

“These offering will be marketed through Digital Xpress Mini and Reliance Digital stores which can use the reach and supply chain management of Reliance Retail. The company is also in talks with multi-brand retail stores and plans to set up Jio-branded stores in future too," he added.

Irrespective of the synergies and restructuring, analysts are concerned over the delay in the roll-out of 4G operations and the consequent rise in capital expenditure.

Reliance Jio has invested close to around $7 billion in laying the infrastructure and an additional investment of $5-6 billion is in the offing, say analysts.

“Even though there is limited clarity with respect to the roll-out plans of Reliance Jio’s telecom services, we do not rule out possibility of significant losses in the initial years, given (1) large operating overheads…and (2) high fixed costs of depreciation/amortization and interest on the indicated capital employed of 700 billion," said a 9 December report by Kotak Securities Ltd.

Close