10

APRIL 14-20, 2013

cover story

Big Telecom
Fresh battle lines have been drawn as Mukesh and Anil Ambani
:: Suman Layak & Binoy Prabhakar

The

n 2006, Reliance Industries (RIL), Indias biggest private enterprise, began to quietly replace all its telephone lines that were not part of state-run MTNLs network. Out went Reliance Infocomm, which RIL boss Mukesh Ambani had passed to Anil Ambani a few months earlier, when the brothers famously split their family businesses under a deal brokered by their mother. In its place, came Bharti Airtel, promoted by Sunil Mittal. The move was hardly unexpected. The division of the Reliance empire was rancorous, to put it charitably, and the Ambani brothers had started sparring again over the listing of the companies carved out of RIL. Yet, Mukeshs move to reject what was now his telecom company and select an arch rivals was a professional and personal setback for Anil. It put paid to Anils hopes, which he expressed at the 2005 annual general meeting of RIL, of retaining his elder brothers companies under the Infocomm banner. Cut to the present. Three years have passed since the Ambanis made peace. Out of the blue, on April 2, the brothers said their telecom companies Reliance Communications (RCOM) and Reliance Jio Infocomm will share a fibre optic network as part of a `1,200-crore deal. Ten days later, the Supreme Court restrained Bharti Airtel on Thurs-

day from providing 3G roaming services to new customers in seven circles where it did not win a permit. The rulings origin goes back to a plea by RCOM in the Delhi High Court (the case is due to be heard again in May).

Changing Equations
These instances are what make the story of Mittal and the Ambanis unusual. The history of Indian business is strewn with hundreds of rivalries, but the one between these three billionaires owing to their shifting alli-

Incumbency is a huge advantage in telecom and acquiring subscribers is expensive and time consuming. RIL has limited experience in services, so the competition will not be a walkover
Mahesh Uppal, Telecom Expert

ances a fight followed by reconciliation new turfs and high sweepstakes makes it a singular case. That they are also among Indias richest Mukesh is No. 1, worth $21.5 billion, Anil No. 11, worth $5.2 billion, and Mittal No. 12, worth $6.8 billion, according to a Forbes ranking lording over business empires worth thousands of crores makes their saga even more absorbing. Thanks to their common interests telecom (all the three) and retail (Mukesh and Sunil) their lives and fortunes seem to be intertwined. Over the years, as the latest pact between the Ambanis and the 3G court case show, the battle lines have been redrawn far too many times to warrant a count. Take for instance the beginning of the conflict. In 2002, Mukesh Ambani stormed into the telecom business. His big gamble was a new technology Bharti chose to be diplomatic, though other players called the bundling of limited mobility and fixed-line licence a backdoor entry that was complemented by low prices (remember the Monsoon Hungama handsets at `501). It paid off: Infocomm secured 1 million customers in 10 days. In three years, Infocomm had usurped the title of Indias biggest telecom operator by subscribers from Bharti. Mittal has himself admitted often that those were the darkest days for his company.

The Longrunning Feud Between Mukesh, Anil & Sunil

The First Fracas

RIVALS: Mukesh and Sunil

WHEN: 2002-2005

Mukesh Ambani storms into the telecom business Bharti is diplomatic. Other operators scream foul. Reliance, they say, entered through the backdoor, using limited mobility that came with its fixed-line licence Mukeshs Monsoon Hungama handsets at `501 a big hit Bharti is soon struggling Bharti survives because Mukesh quits telecom in 2005

The Spectrum Struggles

RIVALS: Anil and Sunil

WHEN: 2006-2010

RCOM lobbies with the Prime Ministers Office to impose a heavy one-time fee on GSM operators who hold spectrum beyond 6.2 MHz RCOM wants refarming (reallocation) of 900 Mhz held by incumbents; Bharti opposes saying the move will disrupt services Bharti favours early auction of 4G spectrum in 700 MHz band, but RCOM opposes the proposal