Saddled With Over Rs 40,000 Crore In Debt, Anil Ambani Admits Defeat As RCom Exits Telecom Biz

There was a time years ago when Airtel, Idea, Vodafone, and Reliance Communications ruled the telecom roost. Now, one of those players is making a quiet exit from the game. Billionaire Anil Ambani has announced that RCom is now pursuing other prospects.

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The company hasn’t been doing so well, and is finally cutting its losses in the telecom sector, in favour of a chasing a real estate future. Though the company was a pioneer in the 2000s for offering cheaper connection plans, it’s now being forced to make a hasty exit in order to balance its over Rs 40,000 crore debt.

“We have decided that we will not proceed in this sector,” the younger Ambani told shareholders at the company’s 14th annual general meeting. “And many other companies have taken a similar call. This is very much a writing on the wall.”

“As we have moved out of the mobile sector, we will monetise at an appropriate stage our enterprise business. Reliance Realty will be the engine of growth for the future of this company,” he added.

Ambani gave the example of the 133-acre Dhirubhai Ambani Knowledge City (DAKC) on the outskirts of Mumbai, saying there’s a huge real estate opportunity RCom has, valuing it’s potential at Rs 25,000 crore. Likely most if not all of that will go towards the 38 lenders it owes, including some Chinese banks. Ambani says he’s confident of squaring the debt within the next few months, alongside other monetisation measures, including selling its telecom infrastructure to the more successful Reliance Jio, which has almost been closed. Supposedly, all they’re waiting for is a final approval from the Department of Telecom.?

What happens to RCom customers?

Customers of Reliance Communications had already been given a deadline of Jan earlier this year, to port to other telecom services, one that was extended from the pre-existing deadline of December 2017.

Ironically, Ambani thanked his older brother Mukesh at the event, for buying the assets off RCom. After all, it’s Reliance Jio that’s credited with upending the telecom sector, for established giants like RCom, with its entry in 2016.