The Reliance Juggernaut On The Move. Again!
Image: Amit Dave/ Reuters
ndia, for Paul E. Jacobs — CEO of $11-billion telecom research and hardware company Qualcomm — has been like a box of chocolates, in a very Forrest Gump way. The good surprise came on June 11, 2010, when Qualcomm won the licence to offer broadband wireless access (BWA) in Mumbai, Delhi, Haryana and Kerala for $1 billion. The nasty one arrived on September 7, 2011, when the Department of Telecommunications rejected its application on flimsy grounds. “It was a silly technicality and the message being sent out by the government was: Even if you commit to investing $1 billion in India, you will be uncertain of your fate,” says B.K. Syngal, a 40-year veteran of Indian telecom and a principal with advisory firm Dua Consulting.
Jacobs was surprised, but it was Sunil Mittal, CEO, Bharti Enterprises, who must have been stunned.
Airtel was set to buy out Qualcomm’s spectrum, at least in Delhi and Mumbai, to roll out its fourth generation (4G) services. “For months, Airtel’s body language among vendors and partners suggested it viewed Qualcomm’s circles as its own,” says Kunal Bajaj, the India head of Analysys Mason, a telecom consulting firm.
But Qualcomm’s rejection meant Airtel would not be able to offer 4G services in Delhi and Mumbai till the issue is sorted out.
No one could be happier than Reliance Industries Limited (RIL). It is now the only company to have a licence to offer broadband in the very lucrative areas of Mumbai and Delhi.
All Your Data Belongs to Us
On June 11, 2010, little-known Infotel Broadband beat the biggies of Indian telecom to win spectrum in every geography on offer. Within hours it emerged that RIL would be buying Infotel for $1 billion. RIL would also make good to the Indian government the $2.7 billion that Infotel had bid for the spectrum.
It was a classic Ambani move — swift, stealthy and massive in scale.
Though it appeared rash and bullish, the move was merely the second step in a carefully laid plan by Mukesh Ambani and his trusted lieutenant Manoj Modi to re-enter the telecom sector. Step one was the May 23 burial of the four-year-old non-compete agreements between RIL and the Anil Dhirubhai Ambani Group, promoted by Mukesh’s estranged younger brother Anil, which prevented RIL from offering telecom services.
Like a tightly-scripted heist flick, a crack team of trusted individuals began arriving for RIL’s second telecom gamble. Most of them had worked with Ambani and Modi during their first, CDMA-based telecom foray.
Modi was the executive sponsor and responsible for highest level investments. Reporting to him was his brother-in-law Jyotindra ‘J.T.’ Thacker who moved up from his role as chief information officer at Reliance. Thacker would be the project manager, responsible for operations and deadlines. Then came Mathew Oommen, most recently chief technology officer at US-based telecom operator Sprint-Nextel. Oommen was the ‘brains’, responsible for creating compelling consumer offers, value propositions and ensuring content, technology and devices work together. Kiran Thomas, assistant vice president at Reliance, and Jagdish Kumar, a Star TV senior executive who came on board this April, completed the core team.
An equally key set of individuals came from outside Reliance, hand-picked and, in many cases, backed by Reliance investments. These included Bharat Goenka, the managing director of small and medium enterprise (SME) focussed software maker Tally; Rohan Shravan, the founder of tablet PC maker Notion Ink; P.K. Bhatnagar, the managing director of telecom network solutions company Rancore and Kenneth Frank, an executive vice president at telecom equipment major Alcatel-Lucent who heads a newly formed joint-initiative with Reliance.
Like his late father Dhirubhai Ambani, 54-year-old Mukesh takes a long term view of market potential and Reliance’s share in it. This time, his big gamble was on wireless data.