Weighed Down
Once a poster child of India’s telecom industry, RCom is yet to get out of debt woods and breathe fire again
It was not a particularly great year for Reliance Communications. Not that the Anil Ambani-led telco was lacking in terms of its offerings, it’s just that the debt burden continued to be a drag that the company worked hard to shrug off.
The telco saw an overall wireless subscriber de-growth of 1.08 percent. While that caused some genuine concerns, industry analysts also noted that there were upsides to that.
The top five telecom circles for Reliance Communications by number of subscribers were Madhya Pradesh, Bihar, UP (E), Delhi and West Bengal. The next five circles were Maharashtra, Gujarat, Karnataka, Tamil Nadu (including Chennai) and Mumbai.
In terms of subscriber share, its five best circles were Madhya Pradesh, Mumbai, Himachal Pradesh, Delhi and West Bengal.
The fact that it had strong presence and subscriber shares in both the top metros of Mumbai and Delhi speaks positively of the telco despite erosion in its subscribers numbers, which is also mostly attributed to a conscious scrubbing of inactive subscribers on its network.
The telco has a strong focus on urban centers, including the metros. In fact, among all the top five operators, it had the lowest incidence of rural subscribers on its network. It had 24.34 percent of its subscribers coming from the rural market segment, as compared to BSNL’s 33.81 percent, Idea Cellular’s 54.69 percent, Vodafone’s 53.69 percent and Bharti Airtel’s 45.44 percent, as of December 2013.
One of its strength areas continued to be wireline—and even more specifically and importantly, the enterprise services segment, where it continued to be a market leader in specific categories.
RCom’s enterprise service offerings include leased circuits (both domestic as well as international) and MPLS IP VPNs and FTTx, among other connectivity offerings. It is also the strongest player in third-party data centers, with its Reliance Data Center division having a massive 6,50,000 sq. ft. of hosting space, spread across nine level-3 data centers at multiple locations.
RCom’s key competitors across the suite of its enterprise service offerings are only a few—the likes of Tata Communications, Sify, Bharti Airtel and BSNL. However, in the data center segment, there also are more focused competitors like Netmagic and CtrlS, among others.
In the meantime, infrastructure sharing deals with Reliance Jio Infocomm came as whiffs of fresh respites for RCom that has been pressured due to the debt it had taken to fund its 3G spectrum wins a few years ago.
In April 2013, Reliance Jio signed a first deal with RCom to use the latter’s inter-city fiber network. In August, the two companies entered yet another agreement to share the telecom towers infrastructure. More recently, in 2014, the two parties have further extended their cooperation to include RCom’s intra-city optic fiber network across India.
On the leadership front, RCom roped in Airtel’s erstwhile head of Mobility as its new CEO in February 2014. The country’s fourth-largest mobile service provider by subscribers is understood to be gearing up for a next round of growth in a dataled era.