Resolute push

India’s largest private sector company is hard at work, trying to re-establish a foothold in telecom services. Despite Mukesh Ambani’s execution skills, the Reliance Infocomm project faced a lot of teething trouble. Reliance’s heft enabled it to withstand the losses, but then came the split. If the troubles of now Anil Ambani-owned Reliance Communications — originally masterminded and spearheaded by Mukesh — made peers quietly celebrate, it is time for them to gear up for another war. 

This time, though, Mukesh is much wiser. There are learnings from past experience — the lessons learnt are not just from his own mistakes but from the rest of the industry as well. Besides, unlike in 2003, when the telecom business was in much better shape with a golden period of growth still ahead, this time most players are struggling financially. Tariffs have fallen to very low levels and new subscribers are hard to come by. Not only that, number portability has brought its own share of anxiety and it’s costlier to expand the network in the hinterland where revenues do not justify capital costs. Above all, everyone’s overpaid for 3G and a quick pay-off is nowhere in sight. 

In this scenario, the elder Ambani has a fairly good chance of capturing market share as his pan-India 4G permit allows him to offer both data and voice services at a cost much lower than that of the competition. Translate that into an aggressive pricing strategy, add in some thoughtful execution, and the result could be a huge disruption in the telecom space. Just how is Ambani’s team gearing up for the battles ahead? To find out, turn to our cover story: Act II. 

In other stories, we have Bharati Shipyard, which completed an untimely, overpaid acquisition in late 2009. The pain of stabilising a badly thought-out buy was compounded by poor execution. As things stand, the hunter and the prey are both in dire straits. The company has received a corporate debt restructuring package but it remains to be seen if it can pull back from the brink. Our attempt at finding out what went wrong : In choppy waters.