The ‘new RCom’ also announced a USD 600-million investment to build a 68,000-km undersea cable network that will carry data to Europe and Hong Kong from its headquarters.
February 16, 2018
Three weeks after announcing a new revival plan to limit its focus to B2B opportunities, Reliance Communications said shutting down the flagship wireless business and building enterprise business is not easy but a “challenge”.
The ‘new RCom’ also announced a USD 600-million investment to build a 68,000-km undersea cable network that will carry data to Europe and Hong Kong from its headquarters and expects USD 700 million in annual revenue on completion.
“One of the challenges is that we are going through setting up an enterprise company while we are actually taking down a wireless company. These aren’t easy,” RCom chief executive Bill Barney told reporters here.
He said the enterprise business of the Anil Ambani-led company was only 10-15 per cent of the overall business, before scaling it down. It can be noted that in late-2017, the company had decided to exit wireless business due to its worsening debt profile forcing it to sell its spectrum license and announce other monetization plans.
Comparing its situation with that of the competition, Barney said peer companies have had the comfort of having two separate holding companies looking after the consumer and enterprise sides, which it did not have.
The company had amassed a debt of over Rs 45,000 crore and the promoters avoided the possibility of ceding majority control to banks through a debt reduction plan late last month, which will depend heavily on monetisation of assets.
Within days of convincing bankers on December 26, it had announced a deal to sell-off core spectrum assets to Reliance Jio, the market disruptor promoted by Ambani’s elder brother Mukesh, for a reported Rs 23,000 crore, helping it pare its debt and retain management control.
