A decade after the Ambani brothers split, Reliance Communications (RCom) Chairman Anil Ambani announced that his telecom company has “virtually“ merged with Reliance Jio Infocomm, owned by elder brother Mukesh. “As far as our 100 million customers are concerned, as far as our 1 million retailers are concerned, as far as our employees are concerned, and as far as our vendors and partners are concerned, there has already been a virtual merger of the two organisations (RCom and Jio),“ Ambani told shareholders at RCom's AGM on Tuesday .
“Our spectrum is shared, our network is shared, our fibre is shared, our towers are shared, our voice is shared...,“ Ambani added. He was responding to shareholder questions about why the two companies aren't officially merging with each other despite numerous agreements around collaboration. RCom and Jio have pacts to share and trade spectrum. Besides, the two also have tower and fibre-sharing agreements. The two telcos have also synced their network operating centres, optic fibre service contracts and network maintenance functions. “There are two committed brothers -Mukesh Ambani and Anil Ambani -both working relentlessly to fulfil the dream of Dhirubhai Ambani,“ said Ambani.
The announcement of a “virtual merger“ of the two companies follows Jio's launch earlier this month. The undivided Reliance Industries had made its first foray into the telecom sector in 2002. Mukesh Ambani and his close friend and aide Manoj Modi spearheaded the launch of the telecom venture.
But after the family division, following Dhirubhai Ambani's death, the telecom business along with the power and financial services businesses went to Anil Ambani, while the oil and petrochemicals business remained with his older brother.
The two brothers signed a non-compete pact, which was scrapped by mutual agreement in 2010. Subsequently, the older Ambani re-entered the telecom sector by buying a company that had acquired pan-India 4G airwaves in an auction. The acquired company was subsequently renamed Reliance Jio Infocomm.
RCom and Jio have already been working in tandem from the start of this year when the former announced it was upgrading all its data users to Jio's 4G network, in what was described by some people as the first test for the new company's 4G data services.RCom then ran a pilot offering 4G data dongles worth Rs.3,999 at Rs.899 in April this year. The service offered 4G at the price of 3G, but the 4G was riding on the Jio network under the sharing agreement.
With the “virtual merger“, and the merger with Aircel, RCom's need for capex and spending at the upcoming auction is limited, the younger Ambani said, adding that putting up a 4G network would have cost Rs.20,000 crore or so.
Commenting on RCom's future, Ambani said the company possessed necessary airwaves across 2G, 3G and 4G bands in addition to the spectrum sharing and trading deals with Jio, and would become one of the top telcos in 12 out of 22 telecom circles after the Aircel merger.
“Our spectrum is shared, our network is shared, our fibre is shared, our towers are shared, our voice is shared...,“ Ambani added. He was responding to shareholder questions about why the two companies aren't officially merging with each other despite numerous agreements around collaboration. RCom and Jio have pacts to share and trade spectrum. Besides, the two also have tower and fibre-sharing agreements. The two telcos have also synced their network operating centres, optic fibre service contracts and network maintenance functions. “There are two committed brothers -Mukesh Ambani and Anil Ambani -both working relentlessly to fulfil the dream of Dhirubhai Ambani,“ said Ambani.
The announcement of a “virtual merger“ of the two companies follows Jio's launch earlier this month. The undivided Reliance Industries had made its first foray into the telecom sector in 2002. Mukesh Ambani and his close friend and aide Manoj Modi spearheaded the launch of the telecom venture.
But after the family division, following Dhirubhai Ambani's death, the telecom business along with the power and financial services businesses went to Anil Ambani, while the oil and petrochemicals business remained with his older brother.
The two brothers signed a non-compete pact, which was scrapped by mutual agreement in 2010. Subsequently, the older Ambani re-entered the telecom sector by buying a company that had acquired pan-India 4G airwaves in an auction. The acquired company was subsequently renamed Reliance Jio Infocomm.
RCom and Jio have already been working in tandem from the start of this year when the former announced it was upgrading all its data users to Jio's 4G network, in what was described by some people as the first test for the new company's 4G data services.RCom then ran a pilot offering 4G data dongles worth Rs.3,999 at Rs.899 in April this year. The service offered 4G at the price of 3G, but the 4G was riding on the Jio network under the sharing agreement.
With the “virtual merger“, and the merger with Aircel, RCom's need for capex and spending at the upcoming auction is limited, the younger Ambani said, adding that putting up a 4G network would have cost Rs.20,000 crore or so.
Commenting on RCom's future, Ambani said the company possessed necessary airwaves across 2G, 3G and 4G bands in addition to the spectrum sharing and trading deals with Jio, and would become one of the top telcos in 12 out of 22 telecom circles after the Aircel merger.
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