No. of Fixed-Line Subscribers (2007): 780,000
No. of Fixed-Line Subscribers (2008): 780,000
No. of Fixed-Line Subscribers (2009): 1.165mn
No. of Fixed-Line Subscribers (March 2010): 1.177mn
No. of Fixed-Line Subscribers (June 2010): 1.191mn
No. of Fixed-Line Subscribers (September 2010): 1.206mn
No. of Fixed-Line Subscribers (December 2010): 1.257mn
No. of Mobile Subscribers (2007): 40.90mn
No. of Mobile Subscribers (2008): 61.345mn
No. of Mobile Subscribers (2009): 93.796mn
No. of Mobile Subscribers (March 2010): 102.422mn
No. of Mobile Subscribers (June 2010): 110.806mn
No. of Mobile Subscribers (September 2010): 117.337mn
No. of Mobile Subscribers (December 2010): 125.652mn
No. of Broadband Subscribers (2008): 101,000
No. of Broadband Subscribers (2009): 123,000
No. of Broadband Subscribers (June 2010): 152,988
No. of Broadband Subscribers (September 2010): 171,225
Company Address
Reliance Infocomm,
Dhirubhai Ambani Knowledge City,
Thane, Belapur Road, Navi ,
406 709 Mumbai, India
Tel: +91 (22) 2762 4000
Fax: +91 (22) 2762 5198
Web: www.relianceinfo.com
– Fully built-in service supplier providing native (fixed wireless), cellular, long-distance and internet providers, and IPTV
– India’s second-greatest wireless operator, having surpassed the 117mn subscriber mark by the top of September 2010
– Strong web profit development pushed by will increase in its cell subscriber base
Weaknesses
– Migration to increased pay as you go usage has an influence on ARPU and non-voice revenue measurement
– GSM customer base nonetheless low, at just lower than 17%, but this is probably going to vary as Reliance invests in its GSM network
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Opportunities
– Deployment of FLAG and FALCON cable networks provides the operator a worldwide presence
– High-velocity mobile network permits vital worth-added revenues from cellular content
– Approval for nationwide GSM providers offers Reliance the chance to increase GSM subscriber base
Threats
– Need to invest heavily in the direction of increasing in rural India could affect profitability and create a need for community-sharing agreements
– Investment essential in extending GSM community might hit profitability within the short term
– Vodafone Essar continues to grow its subscriber base and, with its investment programme, could soon catch up with Reliance
Company Overview
India’s Reliance Group operates all through the country and across the spectrum of wireless, wireline and lengthy-distance voice, data, video and web communications providers. Reliance additionally has a world presence via its submarine cable community infrastructure, which connects forty nations from the US to Europe, the Middle East, India, South East Asia and Japan.
The operator is split into three enterprise models, namely Wireless, Global and Broadband. Reliance presents wireless companies by means of its CDMA (20 circles) and GSM networks (eight circles). In 2009, the service additionally announced the launch of a pan-India GSM network.
Reliance’s Global Unit gives nationwide and international lengthy-distance calling providers, mainly on a wholesale foundation. The operator has some retail providers with a major ILD business within the UK, Canada, the US, Australia and New Zealand. The operator’s managed community providers are available in more than 40,000 areas across 163 nations. Reliance additionally owns 22,000kms of metro fibre community within the US in 14 metros, permitting the company to supply its customers seamless finish-to-end connectivity to these key enterprise markets.
Within India, Reliance is also a significant broadband operator, providing enterprise voice, knowledge, video and internet providers.
In August 2008, Reliance launched nationwide satellite tv for pc Tv companies underneath its wholly owned subsidiary Reliance Big Tv Limited. These services are available on the DTH format to customers in India. Reliance Big Tv is on the market at greater than 100,000 outlets throughout 6,500 towns within the country. At the end of December 2010, it reported having 3.3mn subscribers, representing 11% of India’s DTH market.
Recent Financial Results
Reliance Communications reported whole revenues of INR50.041bn within the three months ended December 2010, a decrease of 2.2% q-o-q and 5.8% y-o-y. Mobile revenues had the same weakness over the quarter to reach INR40.644bn, down from INR41.613bn in September 2010. Perhaps extra worryingly, its quarterly churn fee elevated by 5pps to 4% in December 2010. Meanwhile Reliance Communications’ blended ARPU fell by 9% q-o-q and 25.5% y-o-y to INR111, which partially offset the online addition of 8.315mn subscribers that brought the operator complete to 125.652mn in December 2010. Net revenue increased by 7.7% q-o-q to INR4.803bn, which was the strongest lead to 2010. However, this was down 56.6% from December 2009 and 65.9% from December 2008.
Reliance Communications’ different business segments didn’t fare significantly better, which contributed to the overall decline in its complete revenues. Revenues from the broadband business division fell to INR6.184bn in December 2010 from INR6.617bn within the earlier quarter. Other revenue sources also posted weaker performances and posted a complete of INR3.106bn, a 22% decline from September 2010. Reliance Communication’s world business was the one phase to report growth after registering a 4.6% q-o-q increase to INR19.233bn.
Within the quarter ended September 2010, Reliance Communications posted consolidated revenues of INR51.183bn, a rise of 0.2% from the earlier quarter, whereas cell income noticed a similar growth to INR41.613bn. Although Reliance’s blended ARPU continued to trend downwards to INR122, down from INR130 within the earlier quarter, and net additions additionally came in weaker at 6.531, compared to 8.384mn, the operator posted a web revenue of INR44.592bn. This was a big improvement from the previous quarter net revenue of INR2.509bn, largely resulting from lower financial charges.
Although wires revenue increased to INR41.613bn in September 2010, a rise from INR40.100bn within the earlier year, the operator posted lower revenues for its world, broadband and investment segments. Income from operations fell by 10.2% to INR51.183. Meanwhile, all of Reliance’s business segments reported decrease web income, with its wireless enterprise income declining by 30.4% to INR7.135bn. Similarly, broadband revenues fell to INR1.263bn, a decrease of 38.4% y-o-y.
Ownership
In June 2010, Reliance was reported to be in talks with South African telecoms company MTN on a deal to create one of many world’s 10 largest telecoms firms, worth an estimated US$70bn and with 116mn subscribers worldwide. The talks were mentioned to have begun in May 2010 after rival Indian operator Bharti Airtel dropped out of negotiations with MTN. However, there is some confusion surrounding the alleged talks, which have been denied by MTN and which would have to be accredited by South Africa’s regulatory authorities earlier than being allowed to proceed.
Reliance first initiated tie-up talks with MTN in 2008 in what was finally a thwarted deal. Meanwhile, Reliance confirmed in June 2010 that the company’s board had authorized promoting as much as a 26% stake to strategic or private private equity investments traders. The cellco did not give any timeframe or particulars for a possible deal, however in accordance with Reuters, the UAE’s Etisalat, MTN and AT&T are potential partners. As famous above, MTN has publicly denied that it’s in talks with Reliance. Meanwhile, AT&T declined to touch upon the rumours. Reliance — the only main Indian wireless operator with no international partner — is believed to be eager on promoting the stake to help address its net debt, which stood at INR199bn (US$4.2bn) at the tip of March 2010. In February 2010, the operator paid INR85.85bn to purchase 3G cellular concessions.
Wireless Network Development
In August 2008, the TRAI ordered the incumbent Indian GSM operators, including Bharti, Idea, Vodafone, Spice and state-controlled BSNL, to supply interconnection with Reliance Communications’ new GSM network. India’s main GSM operators had been trying to delay interconnection, claiming that they should negotiate separate commercial agreements with Reliance, as their current interconnection settlement only covers its CDMA community. The regulator rejected these causes and has threatened to seek criminal proceedings against the GSM operators if they didn’t interconnect with Reliance as ordered. The regulator can levy fines of US$4,600 per day till compliance is reached. The TRAI subsequently announced that all of India’s GSM operators had signed an settlement with Reliance to resolve all pending issues related to interconnection.
For the financial 12 months ending March 2009, Reliance planned to speculate US$6bn following up on its community roll-out plans. As part of its investment pledge, Reliance deliberate to broaden its community to cover every Indian city with a population more than 1,000.
In one other modern transfer, there are solutions that Reliance is aiming to develop into a worldwide MVNO platform, creating a single network throughout some 60 international locations. It’s in discussions with several operators over the potential for renting capacity from Reliance’s network.
In February 2009, it was reported that Reliance was planning to launch a rural model of its Net Connect wireless web service. The service, which uses the operator’s CDMA community to provide web access at speeds of as much as 144kbps, is at present obtainable in more than 20,000 towns, with costs beginning at INR650 (US$13.28) per 30 days. It plans to supply the rural service at about INR500 per thirty days. Reliance will companion with Huawei for the roll-out.
In March 2009, Reliance announced the launch of a new wireless broadband service, which it claims would be the fastest in India up to now. The new service, marketed underneath the Reliance Netconnect Broadband Plus banner, relies on CDMA technology, and it will present downstream speeds of as much as 3.1Mbps and upstream speeds of as much as 1.8Mbps. Initially it is going to be accessible in 35 cities, together with Guntur, Hyderabad, Kakinada, Bangalore, Mysore, Mumbai and Delhi. The operator mentioned that it expects ARPU from the brand new service to be roughly INR600-850 (US$11.44-16.21) monthly; ARPU on Reliance’s existing wireless internet offering, Reliance Netconnect, is reportedly between INR500 and INR800 per month. The new broadband connections will cost between INR299 and INR1,750 per 30 days.
In September 2009, Reliance announced plans to revive the IPO of its towers unit and could elevate US$900mn for a 10% stake. Reliance Infratel, working greater than 48,000 telecoms towers, is to file an utility with the nation’s capital markets regulator. However, these plans were shelved after Reliance agreed to merge with GTL Infrastructure.
That stated, the cell tower deal between Reliance and GTL collapsed after each events failed to succeed in an agreement on terms. The deal would have reduced Reliance’s debt by US$3.9bn and created an organization with 80,000 towers and an enterprise value of US$11bn. The company has been unsuccessful in selling its 26% stake in order to scale back its debt burden however it was reported by the Economic Times that Reliance could raise as much as US$500mn by promoting bonds through Reliance Globacom.
In January 2011 Reliance Communications was reportedly in talks with three operators to determine a 3G roaming alliance. Local rivals resembling Bharti Airtel, Idea Cellular and Vodafone Essar were finalising a strategic agreement to offer 3G companies on a pan-India level bar Odisha state.
Wireline Network Development
I
n February 2007 Vodafone unveiled a excessive-progress 5-12 months technique for India, which involved bringing extremely-low-cost handsets and wireless connectivity to rural India as well as contributing to community improvement. Vodafone has made the availability of low-value handsets a core a part of its Indian technique. Its fundamental thesis is to make cellular telephony extra reasonably priced to extra Indian consumers. It is able to capitalise on its position as a significant international company in order to do this. The operator can be channelling a number of billion dollars of investment into rural India on the again of community-sharing agreements with operators reminiscent of Bharti Airtel and Idea Cellular.
The Reliance network encompasses 24,000 towns, 600,000 villages and all major railway routes and highways, which cowl 90% of the country’s population. The nationwide inter-metropolis long distance network consists of greater than 160,000 route kilometres of ducted fibre-optic cables. Your entire inter-metropolis and metro fibre optic backbone community is deployed in a ‘ring and mesh’ structure and is MPLS-enabled. The Reliance Data Network has greater than 180 MPLS integrated network nodes.
In a further investment plan, Reliance introduced it is going to inject US$500mn in the building and acquisition of WiMAX networks across Asia, Europe, Latin America and Africa, as a part of its purchase of eWave World, a London-primarily based operator with WiMAX licences in several countries. It hopes to launch services in another 30 countries by 2012 (eWave already serves 20 countries).
The operator has already outsourced the management of its wireless networks, having inked a deal with Alcatel-Lucent Managed Solutions in July 2008; RCOM holds roughly 33% of the joint enterprise (JV). In the preliminary phase of the JV, between July 2008 and September 2008, it dealt with CDMA and GSM operations and maintenance for five circles for RCOM. In the second section from October 2008, RCOM handed over the remainder of India’s operations. Within its first yr of operation, it claims the JV has achieved operational cost financial savings of between 20% and 25%.
In July 2009, Reliance revealed that it was contemplating outsourcing the administration of its fastened-line and broadband services as it looked to cut prices. It’s believed that the operator could finalise a contract for the outsourcing inside the next three to four months, with any deal value more than an estimated US$1bn. Commenting on the doable plan of action, Sandip Biswas, head of managed providers at RCOM, stated: ‘We need to outsource the management of our optic-fibre, broadband and fastened line companies. We are in discussions with involved events and should be capable to finalise it in the next three months’.
In May 2010, India’s Economic Times newspaper reported that RCom was set to launch IPTV companies in Delhi and Mumbai inside the next three months. The newspaper cited feedback made by RCom’s CEO (DTH and IPTV) Sanjay Behl. ‘We plan to start out our proposed IPTV service initially in Delhi and Mumbai in the following three months. Within the second phase we also have plans to introduce it in six different cities’, Behl mentioned.
Strategy
Like Vodafone, Reliance has pursued a technique that seeks to increase cellular telephony inside rural India using low-cost handsets and versatile pay as you go tariffs. It, too, has been implementing a significant community growth programme that seeks to combine the advantages of each GSM and CDMA applied sciences. Reliance is looking to challenge the dominance of state-owned BSNL in rural areas, with the corporate stating it aims to seize 30% of the rural internet subscriber base within one 12 months.
Like its main rival Bharti, Reliance also has bold plans for Sri Lanka. In April 2008, it was reported that Reliance had formed a joint venture, named Reliance Mobile Lanka, with native agency Electroteks. The company intended to start providing GSM services in Sri Lanka before end-2008.