Anil Ambani: Creative destruction of telecom sector resulting in oligopoly
Reliance Communications (RCom) on Tuesday said it will exit the telecom business completely and will focus on real estate going forward. Reliance Communications has obtained approval of 100% Indian and foreign lenders on its asset monetisation plan for overall debt resolution.
Reliance Communications (RCom) on Tuesday said it will exit the telecom business completely and will focus on real estate going forward. Reliance Communications has obtained approval of 100% Indian and foreign lenders on its asset monetisation plan for overall debt resolution, company’s chairman Anil Ambani said at the annual general meeting on Tuesday.
At present, Reliance Communications is serving 35,000 businesses through the enterprise, data centres, undersea cables and international voice calling verticals and will get half of its revenues from abroad.
Reliance Realty, a wholly-owned subsidiary of Reliance Communications, at present owns and operates DAKC, a 133-acre registered IT park in Navi Mumbai. DAKC will be developed to create a commercial space of 30 million square feet and the valuation of this development project, as per HDFC Realty, is estimated to be over Rs 25,000 crore.
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The company already has 3 million sq ft of built-up space, which will be leased out to multi-nationals and the company expects revenue accruals through it from this financial year itself.
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The telecom sector is saddled with a debt burden of over Rs 7.7 lakh crore and employment in the sector has halved over the last two years. The hyper-competition in the industry has led to over 20 lakh job losses.
“There has been a creative destruction of the telecom sector resulting in creation of oligopoly, which is going towards a duopoly and maybe even a monopoly in the future,” Ambani said.
Reliance Communications owes about Rs 45,000 crore to a group of 38 lenders, including Chinese banks.
Source: DNA Money