 ARTICLE : ANIL AMBANI : THE FALL OF A BILLIONAIRE

 SOURCE : INDIAN TODAY NEWS

 DATE : 25th MARCH, 2019

 BY : MAYUR SHETTY

https://www.indiatoday.in/magazine/the-big-story/story/20190325-the-fall-of-a-billionaire-
1477813-2019-03-15

In this article, Mayur Shetty writes about how after the death of businessman Dhirubhai
Ambani, father of Mukesh and Anil on 6 July 2002, his Rs 28,000 crore business empire that
he had built over 25 years split between his two sons Mukesh and Anil. While Mukesh could
make a success of what he got, Anil went the other way.

The bread-and-butter petrochemicals operations went to Mukesh Ambani whereas Anil got
what was the new-age telecom business, along with the financial services and energy
business, which held a lot more promise. Anil Ambani changed the name of the company
from Reliance Infocomm to Reliance Communications (RCom) and went in for expansion
and change in technology form CDMA to GSM platform. He bought telecom spectrum at
highly inflated price and invested heavily in laying telecom cables and building towers. All
this led to tremendous growth in revenue and subscriber base. But it came at the expense of
borrowing heavily from banks and institutions. Servicing a debt of Rs 48,000 crore became
difficult for RCom. Things changed from bad to worse when in May 2010, Mukesh entered
the telecom business with Reliance Jio and laid the foundation for what would be the biggest
disruption ever in the telecom space. RCom business shrunk from revenues of Rs 19,000
crore in 2008 to Rs 4,684 crore in the 2018. By 2019 mobile telephony venture of RCom was
all but wound up. Market capitalisation plunged from a peak valuation of Rs 1,65,917 crore
in January 2008 to just over 1 per cent of the value at Rs 1,687 crore on February 18, 2019.
RCom shocked investors by filling for bankruptcy and proposing a debt resolution plan to the
National Company Law Tribunal (NCLT) in February 2019.

The article narrates the whole story of Reliance Communication – from its birth to its decline
and how unbearable debt burden and the advent of a new unforeseen competitor threatened
the very existence of the company and brought it down on its knees. It gives an explanation in
nutshell of the project topic ‘Decline of Reliance Communications.’
 ARTICLE : FROM GLORY TO DUST : AN AMBANI BRAND’S JOURNEY TO
BANKRUPTCY

 SOURCE : REDIFF.COM

 DATE : 5th FEBRUARY, 2019

 BY : MUKTI SHAH

https://realtime.rediff.com/news/business/From-glory-to-dust-An-Ambani-brands-journey-to-
bankruptcy/b5bbbb63efd9ad5f

In this article the writer, who names 'Reliance' and 'Ambani' as synonymous with success,
narrates how Reliance Communications after a glorious past finally went in for bankruptcy
and landed at the door steps of National Company Law Tribunal (NCLT) for resolving its
unmanageable debts.

Being the richest people everyone considered the two brothers – Mukesh and Anil Ambani as
the gurus of success. But with their fallout after father Dhirubhai Ambani’s death in 2006,
the business was divided between the brothers. RCom landed with Dhirubhai Ambani’s
younger son Anil. Sectoral stresses, heavy debts, fierce price wars and plunging profitability
that crippled India's telecom sector also took their toll on RCom. The company was unable to
repay its lenders and vendors. Finally, in May 2018, the NCLT admitted three insolvency
petitions against RCom filed by the Swedish company Ericsson, which was seeking a
payment of over Rs 1,100 crore in dues. RCom moved the National Company Law Appellate
Tribunal (NCLAT) and averted bankruptcy proceedings by citing its telecom infrastructure
sale deals with Jio and Brookfield. It agreed to pay Ericsson Rs 500 crore as a settlement. The
spectrum sale to Jio was rejected by the Department of Telecommunications (DoT) after Jio
refused to be held liable for any of RCom’s past dues. Its towers sale deal with Brookfield
also failed. RCom was unable to pay Ericsson, triggering contempt of court petitions in the
Supreme Court against RCom’s chairman Anil Ambani. Finally Mukesh Ambani helped his
younger brother Anil to pay the Rs 500 crore dues to Ericsson and escape imprisonment.
The article draws attention to how humongous debt being one of the chief reasons for the
downfall of Reliance Communications.

 ARTICLE SOURCE : THE ECONOMIC TIMES

 DATE ; 16th JULY, 2019

 BY KETAN THAKAR

https://economictimes.indiatimes.com/industry/telecom/telecom-news/from-glory-to-dust-an-
ambani-brands-journey-to-bankruptcy/articleshow/67837769.cms?from=mdr

Writer Ketan Thakar explains various efforts were made by RCom and Anil Ambani to put
Reliance Communications back on track inspite of falling market share and huge debts.

In June 2005, when the break up took place in the Reliance group, Mukesh Ambani agreed to
hand over the telecom business as part of a family settlement to Anil Ambani. RCom did a
number of things to stay ahead in the race.
 RCom by December 2006 had an over 20 per cent market share.
 His brother Mukesh’s ‘Monsoon Hungama’ scheme, offering devices bundled with voice
and data at Rs 501, forced the firm (then Reliance Infocom) to write off Rs 450 crore of
bad debts and disconnect 10 per cent of the subscriber base. But Anil Ambani still took
the firm on a roll with some swift action.
 RCom shifted from CDMA to GSM and laid out GSM services within 12 months. It
grabbed users through an aggressive pricing strategy (he was 60 per cent cheaper than
rivals) and had an ambitious target to reach 100 million users.
 Seeing an opportunity in 3G, Anil decided again to enter with a bang. Reliance
Communications (RCom) shelled out Rs 8,500 crore to buy 3G spectrum in over 13
circles, which included the expensive Delhi and Mumbai circles. It seemed to be working
- five years after accepting the family settlement, he had catapulted RCom to make it the
second-largest telecom company in India with a four-fold increase in its customer base
which hit 125 million by December 2010.
 RCom bought over and Sistema Shyam Telecom Limited (SSTL) which operates the
MTS brand and merged SSTL with RCom.
 RCom tried to merge Aircel with itself but the deal could not go through.
 But 14 years after Anil took over the business, RCom decided to stop operations in 2017
and sell its assets to pay off Rs 43,000 crore of debt, finally filled for bankruptcy and
went to the National Company Law Tribunal (NCLT).

The article describes how within in a decade things reversed dramatically from being a
success story to a collapsed venture. The firm’s debt doubled from Rs 25,000 crore in 2010 to
the current figure of around Rs 43,000 crore. The last trigger came from Mukesh’s re-entry
into telecom through Jio. And, RCom was just one of many others (TTSL, Telenor, MTS)
who had to put shutters down.
 ARTICLE : RCOM READIES FOR FIRE SALE OF ITS ASSETS TO PARE
DEBT AS AIRCEL MERGER FAILS

 SOURCE : LIVE MINT

 DATE : 3rd OCTOBER, 2017

 By : AMRIT RAJ

https://www.livemint.com/Companies/KFJtF12XeiAnLmVd0YPhyO/RCom-readies-for-fire-
sale-of-its-assets-to-pare-debt-as-Ai.html
This article written by Amrit Raj explains how Reliance Communications Ltd (RCom), after
calling off a planned merger of its wireless unit with Aircel Ltd, started preparing to monetize
assets ranging from sale of spectrum to real estate, so as to repay debt owed to the banks,
lenders and vendors.

RCom had accumulated a debt of Rs 47,000 crore. The banks allowed the company to
postpone debt-servicing payments till December 2017 after it presented a restructuring plan
involving the sale of its assets. Under the revised plan, the company would have to bring
down its debt by as much as Rs25,000 crore, or more than half. The company planned to
adopt a 4G-focused policy, which would enable it to sell its 2G and 3G spectrum. It also tried
to put on sale real estate assets in Hyderabad, Chennai and Navi Mumbai, apart from its
corporate office in Delhi and the Dhirubhai Ambani Knowledge City in Navi Mumbai. Sale
of the real estate assets, for which the firm received interest from some Indian as well as
global firms, would have fetched the company Rs11,000 crore. A telecom tower deal with
Brookfield Asset Management Inc. would have brought about Rs11,000 crore. The merger
with Aircel and a separate deal to sell RCom’s telecom tower assets were important to Anil
Ambani’s plan to pay down debt. Earnings of RCom and other telecom companies had been
under pressure because of price competition posed by Reliance Jio, controlled by his elder
brother Mukesh Ambani, which launched its services in September 2016. .

This article reflects on the efforts made by RCom to pare down its debts even after the
planned merger with Aircel failed. Unfortunately all these efforts bore no fruits leading to
the eventual decline of Rcom.
 ARTICLE : TELECOM DEPARTMENT APPROVES RCOM-MTS MERGER

 SOURCE : THE ECONOMIC TIMES

 DATE : 23rd OCTOBER, 2017

 BY : GULVEEN AULAKH

https://economictimes.indiatimes.com/news/company/corporate-trends/telecom-department-
approves-rcom-mts-merger/articleshow/61182736.cms?from=mdr

With an aim to increase revenues, get new spectrum and increase subscribers RCom bought
over Sistema Shyam Telecom Limited (SSTL) and tried to merge the two companies.

The telecom department approved the merger of Reliance Communications (RCom) and
Sistema Shyam Telecom Limited (SSTL) which operated the MTS brand in nine circles in
India. The department, which was the final authority to give a nod to the merger, gave a go-
ahead, following which operations of the Russian backed carrier which had 4 million users,
got transferred to RCom. The deal, which was valued at Rs 5,000 crore, provided RCom
with 3.75 MHz of highly valuable spectrum in 850 MHZ band in Delhi, Gujarat, Tamil Nadu,
Karnataka, Kerala, UP (West), Kolkata, West Bengal and Rajasthan. SSTL has spectrum
holdings in these circles and therefore reduced the need for RCom to buy spectrum in future
auctions. The Russian Systema controlled SSTL got a 10% stake in Reliance
Communications. According to the Telecom Regulatory Authority of India (TRAI), MTS
had nearly 4 million customers. Considering that all of these customers were users of data,
they added value to RCom’s base of 81 million users. RCom also benefitted from MTS'
revenue generation of Rs 1,000 crore. All of MTS' customers moved to 4G when they moved
to RCom.

This article shows how RCom with an aim at increasing revenues and building market share,
kept on buying weaker rivals like SSTL. These purchases were funded by taking debts which
eventually become so huge that servicing them became impossible leading to the demise of
the company.
 ARTICLE : RCOM CALLS OFF MERGER DEAL WITH AIRCEL

 SOURCE : THE HINDU

 DATE : 1st OCTOBER, 2017

 BY : PIYUSH PANDEY

https://www.thehindu.com/business/Industry/rcom-aircel-mobile-business-merger-called-off/
article19781323.ece

In this article the writer Piyush Pandey explains how Reliance Communications (RCom)
planed to merge its wireless business with rival Aircel, but had to be called off citing legal
and regulatory uncertainties as well as ‘intervention of vested interests to derail the deal’.

RCom had about Rs 42,000 crore in debt. In FY 17 RCom reported net loss of Rs 1,796
crore. It was exploring alternatives to reduce debt through possible sales of spectrum, tower
and real estate assets. The deadline allowed by the lenders to repay Rs 25,000 crore of
outstanding loans was to end on December 31 st. Now with the entry of Reliance Jio and its
free plans, it triggered a price war in the industry. As a result attempts at consolidation had
began in the telecom sector. Vodafone and Idea announced plans to merge. Vodafone-Idea
projected $23-billion deal creating India’s largest telecom firm with a subscriber base
exceeding 400 million. Airtel eyed acquiring Telenor India’s operations in seven circles with
a combined subscriber based exceeding 300 million. And RCom planned to merge rival
Aircel with itself. The proposed deal with Aircel and the sale of its tower assets to Brookfield
together were expected to lower RCom’s debt by 60%. But due to legal and regulatory
uncertainties the merger had to be called off. Had the merger gone through, it would have
created India’s third-largest telecom provider (in 2017) with 175 million subscribers.. The
company also planed for monetisation of its tower and fibre assets and started monetisation
plans for prime real estate assets, including at Dhirubhai Ambani Knowledge City, Navi
Mumbai and prime property near Connaught Place. But the collapse of Aircel deal had a
domino effect. With its failure, the sale of tower assets to Brookfield also didn’t materialise.
With mounting debts the company had to go in for bankruptcy proceedings.
This article describes how RCom knocked on different doors and made various attempts to
reduce its debts – by merging a rival with itself, by trying to sell its fibre assets or monetising
its real assets. None of them succeeded eventually leading to the demise of the company.
 ARTICLE : RCOM GOES TO BANKRUPTCY COURT TO RESOLVE DEBT
BURDEN

 SOURCE : REUTERS

 DATE : 1st FEBRUARY, 2019

https://in.reuters.com/article/rcom-debt/rcom-goes-to-bankruptcy-court-to-resolve-debt-burden-
idINKCN1PQ4WT

RCom, controlled by Anil Ambani, owed banks $7 billion as of March 2017 and more to
vendors. Reliance Communications seeking fast track resolution through National Company
Law Tribunal (NCLT) approached the court that deals with bankruptcy cases, to resolve its
debt position.

RCom struggled under heavy debt and reported a string of losses during a price war, triggered
by the market entry of Reliance Industries’ telecoms venture Jio Infocomm, owned by
Mukesh Ambani - Asia’s richest person and Anil Ambani’s older brother. The cut-price
competition had prompted RCom to reduce operations by shutting down its wireless business.
The lenders had not received any proceeds from its asset monetization plans, and that its
overall debt resolution process had not made any progress. Over twelve months, talks with
forty lenders to reach a consensus had become impossible and drove the company to the
bankruptcy court.

In this article the writer shows how the company eventually had to resort to the final option
of approaching NCLT for its debt resolution.

JOURNALS
 TITLE : MARKETING STRATERGIES OF TELESERVICES PROVIDER-
RELIANCE COMMUNICATION.

 SOURCE : SHODHGANGA.COM

 DATE : 19-SEP-2014

 RESEARCHER : SADIKA, DIVYA

http://shodhganga.inflibnet.ac.in:8080/jspui/handle/10603/25270

The authors write about the large extent of coverage RCOM had in 2014. Along with their
motto of providing rich content at reasonable prices. The author also talks about the future
plans RCOM had for its growth.

RCOM had spread extensively in 1100 town having 7000 retail outlet for easy accessibility
of the customers. With nearly 1.6 million customers in 2014, they used an aggressive growth
policy providing customer friendly plans. This lead to increase in 30% in their customer base
each month. In addition to providing customer friendly plans, RCOM was also providing rich
content (news, tv channels, emergency application etc) at reasonable prices. Their future
plans were to introduce Rs 10 recharge plans to reach out to the masses (similar to small
shampoo sachets provided by FMCG companies), lower traffic rates and come up with
innovative plans to attract customers.

As RCOM was under huge debt, their strategy of adopting better content and innovative
plans all at a less price, resulted in increase in customer base. But it in no way helped in
reducing the debt burden of the company. Instead costs kept on piling and profits were
negligible.
 TITLE : IMPACT OF RELIANCE JIO ON INDIAN TELECOM INDUSTRY : AN
EMPIRICAL STUDY.

 SOURCE : INTERNATIONAL JOURNAL OF SCIENTIFIC RESEARCH AND

 DATE : 07-JULY-2017

 RESEARCHER : RAJBINDER SINGH

 |Volume||5||Issue||07

 www.ijsrm.in ISSN (e): 2321-3418

The author emphasises on the entry of JIO which acted as a huge competitor for other
telecom businesses. According to Paulasset, Reliance Jio is working according to the Indian market;
it gives best quality services at much less price.

This report mentions about the entry of JIO – at a discounted price and easy immediate access to
sim by linking it the Aadhar card. This created disruption of other business models. Companies in this
sector had to take lot of debt as the spectrum itself was purchased for Rs 65,000 crores. Due to
which RCOM came under heavy crunch – escalating costs and falling revenues. To overcome all this,
RCOM signed a binding agreement with Brookfield Infrastructure Partners to sell 51% stake in
RCOMs tower units. The deal failed for various reasons. In a deal valued at Rs 4,500 crore (US$ 675
million) RCOM acquired Sistema Shyam TeleServices Ltd (SSTL), which included payments to the
government for spectrum allotted to Sistema.

Due to the entry of JIO and huge debt RCOM could not sustain itself in the market. On one hand
customers running for discounted traffic rates and superior data coverage, and on the other hand a
huge unserviceable debt, RCOM could not survive in the market and collapsed.