In a move that would surprise and excite many telecom honchos , Reliance Jio announced a total CAPEX of 1.5 Lakh Crore. The companies group Chairman Mukesh Ambani made an announcement while reporting the highest operating profit for Reliance Insdustries in 8 years. According to group’s deputy CFO “Our capex in the reporting fiscal year stood at Rs 1.20 trillion and this will go up to Rs 1.5 trillion in the ongoing fiscal year. The money will be spent to complete the ongoing expansion projects at Jamnagar and the rollout of the telecom network.”
The announcement would push the oil major’s telecom initiative to the next level. According to the Deputy CFO 50,000 to 60,000 crore will be used to expand the Jamnagar refinery while 60,000 crore will be used for Reliance Jio and rest will be used for company’s retail arm. Around $150 million which is around 1,000 crore will be used for US shale gas operations
It is interesting to see that with a record decrease in crude oil price , Reliance industries has seen the highest increase in profit in eight years.
Bharti Airtel will invest Rs 60,000 crore in next three years to improve its data and voice services. The biggest telco decided to focus its resources more on technology as it will be facing challenges from other Telecom companies including the newly announced Reliance Jio. The company has named the plan as Project Leap and would use the funds to buy new equipments , expand the current broadband network and cover more and more are from its optical fibre network. The move is followed by investment plan announced by Vodafone , which plans to invest 13000 crore and Reliance Jio which has a massive pan of 1 Lakh Crore to invest in technology and infrastructure.
Speaking at a press conference the Company’s CEO of India and South East Asia said “The bulk of the investment will be in building infrastructure as the company has already bought most of the airwaves needed”.
The company has already planned a Capex of Rs 15000 crore by March 2016 and plans to invest in acquiring a few pockets in the 2100 MHz band in a few circles. The bandwidth will be used to offer seamless 3g services to audience while 700 MHz will be used to offer the 4G services . The company also plans to install 70,000 more base stations by March 2016.
Vittal denied reports that the company is investing ahead of Reliance Jio and said that the investment is done in order to refurbish its existing aging infrastructure. According to Vittal “I will not say it is in response to Reliance Jio’s launch but in response to expiry of permits which has led us to buy different configuration of spectrum,” Vittal said. “Competition doesn’t give us sleepless nights, it’s quality of services to our customers which does.”.
Bollywood actress Shilpa Shetty along with her husband Raj Kundra today launched Viaan Mobile Phones. The brand is named after their three year old son Viaan. The couple launched five variants of the brand with a personalized service. The phones are priced between Rs 849 and Rs 12999.
According to Shilpa Shetty “The stats say that India happens to be the second-largest consumer of mobile phones. And that was the deal-clincher for us to even make a foray here. I’ve also heard that we buy around 2 crore phones in a month in just India and 80 percent of those phones are below 10,000 rupees. And we cater to that market. I think even if we are able to conquer around 2-3 percent, which is about 5 lakh mobiles in a month, we’ll be home and that’s what we’ve stepped out to do. For us in India, the choice was mass or class and we decided with Viaan to bring the class to the mass.”
Mr Kundra added that “I get to launch not only a mobile phone in this booming mobile phone market but it’s also on my son’s name. I’ve been part of this since inception and we’ve made sure that in this cluttered phone market, what could we do different than what’s been there and done already, We are the first Indian phone brand to launch simultaneously in seven countries”.
Viaan mobiles come with a personalized concierge service V assist that will help users 24 X 7 and offer it customers services in travel, entertainment, shopping, gifting and utilities – Assist will also promote services through their flagship shopping brand Raj Best Deal TV. According to Kundra “resonating with the brand name Viaan, meaning full of life and energy, we hope to provide consumers with smart phones that not only help them connect with loved ones but also take complete care of their needs. Viaan mobiles are trendy, strong and work on the latest technology”.
The phones will be initially launched in five variants V-1.8, V-Emerge, V-Empower, V-Encore and V-Eternal.
In a bid to focus more on defense manufacturing company , Anil Dhirubhai Ambani group is offloading its stakes in various Cos and raising adequate funds. So after reducing its stake in Reliance Life and Reliance capital the group has decided to sell its stake in the tower unit Reliance infratel. With this sale , Reliance will be the fourth company to exit the telecom tower business in recent times. In a statement issued to Economic Times one of the senior executive of Reliance said “The deal will be announced within a couple of days, and will value Infratel at around Rs 22,000 crore”. The company plans to reduce its debt of over Rs 38000 crore from this sale and consolidate its other portfolios. Standard Chartered and SBI capital markets will be the official bankers to initiate and finalize this deal.
Last month American Tower Cooperation bought the controlling stake in Vion Networks .The deal was then valued around 21,000 crores.
RCOM is the largest stakeholder in Reliance Infratel with 96% stake followed by small investors like George Soros’ Quantum (M), NSR Partners, Galleon, HSBC Daisy Investment (Mauritius), Drawbridge Towers and Investment Partners B (Mauritius).All the other partners will also exit the business along with Reliance communications.
Bharat Sanchar Nigam Limited , the Indian state run telecommunication provider posted a positive operating revenue by increasing it to 27,242 crore in the financial year which ended on March 2015.This is the highest operating revenue the company has posted in 5 years.
The company was in dire condition with an operating loss of Rs690 crore in the financial year 2013-14 . The turnaround came because of the initiative done by the management to improve the employee and the infrastructure cost. The company reduced its employee strength from 3.25 Lakh employees to 2 Lakh employees mainly due to retirement.
According to Managing Director Anupam Srivastava “Data is part of the key strategy for the turnaround. We missed the voice bus so now our main focus is on data.” According to the financial report of the company Data was the main cash cow of the company as it contributed 10% to the overall revenues. Still the data driven was below the Industry average of 20%.
The company has a low debt strategy with 0.13 debt-equity ratio. The CAPEX will take the upward spiral by Rs4400 crores. This CAPEX will be used for Data expenditure and installation of new infrastructure in the eastern zone of the country. The company already has the lowest data tarrif in the country. Other than DATA infrastructure the company plans to invest on increasing the number of telecom towers and improve customer service by adding more call centres.
The company is planning to launch a new tower sharing enterprise and the revenues from the same will increase from the current 42% .The company has also focused on reducing the MNP(mobile number portability) by providing additional benefits to the consumers. The MNP’s decreased gradually this year as the number of people porting in were 1.57 lakhs while only 1.24 lakh people ported out.