Manegerial Economics

Project Report

Submitted by : Ankit Singh

Roll no : 18-064
Siva Sivani Institute Of Management
1 Reliance Communications

Overview >>
The Late Dhirubhai Ambani dreamt of a digital India — an India where the common man
would have access to affordable means of information and communication. Dhirubhai, who
single-handedly built India’s largest private sector company virtually from scratch, had stated
as early as 1999: “Make the tools of information and communication available to people at an
affordable cost. They will overcome the handicaps of illiteracy and lack of mobility.”

It was with this belief in mind that Reliance Communications (formerly Reliance Infocomm)
started laying 60,000 route kilometers of a pan-India fiber optic backbone. This backbone was
commissioned on 28 December 2002, the auspicious occasion of Dhirubhai’s 70th birthday,
though sadly after his unexpected demise on 6 July 2002.

Reliance Communications has a reliable, high-capacity, integrated (both wireless and wire line)
and convergent (voice, data and video) digital network. It is capable of delivering a range of
services spanning the entire infocomm (information and communication) value chain, including
infrastructure and services — for enterprises as well as individuals, applications, and consulting.

Today, Reliance Communications is revolutionizing the way India communicates and networks,
truly bringing about a new way of life.

Business >>

India’s leading integrated telecom company

Reliance Communications is the flagship company of the Anil Dhirubhai Ambani Group (ADAG)
of companies. Listed on the National Stock Exchange and the Bombay Stock Exchange, it is
India’s leading integrated telecommunication company with over 85 million customers.

Our business encompasses a complete range of telecom services covering mobile and fixed
line telephony. It includes broadband, national and international long distance services and data
services along with an exhaustive range of value-added services and applications. Our constant
Endeavour is to achieve customer delight by enhancing the productivity of the enterprises and
individuals we serve.

Reliance Mobile (formerly Reliance India Mobile), launched on 28 December 2002, coinciding
with the joyous occasion of the late Dhirubhai Ambani’s 70th birthday, was among the initial
initiatives of Reliance Communications. It marked the auspicious beginning of Dhirubhai’s
dream of ushering in a digital revolution in India. Today, we can proudly claim that we were
Instrumental in harnessing the true power of information and communication, by bestowing it
in the hands of the common man at affordable rates.
2 Reliance Communications

Profile >>

Reliance Communications Limited (RCOM) is the flagship company of the Reliance Anil
Dhirubhai Ambani Group, India’s second largest business house. RCOM is India’s largest
integrated and fully converged communications service provider in the private sector, and has
been rated among “Asia’s Top 5 Most Valuable Telecom Companies”. RCOM has a retail
customer base of over 48 million as on 30th April, 2008 including over 1.5 million individual
overseas retail customers. The corporate clientele includes 2,100 Indian and multinational
corporations, and over 800 global, regional and domestic carriers. RCOM has established a
pan-India, next generation, integrated (wireless and wire line), convergent (voice, data and
video) digital network that is capable of supporting best-of-class services spanning the entire
communications value chain, covering over 20,000 towns and 450,000 villages, and growing.
RCOM owns and operates the world’s largest next generation IP enabled connectivity
infrastructure, comprising over 175,000 kilometers of fiber optic cable systems in India, USA,
Europe, Middle East and the Asia Pacific region.

Mission: Excellence in Communication Arena

 To attain global best practices and become a world-class communication service

Provider – guided by its purpose to move towards greater degree of sophistication and
maturity.
 To work with vigor, dedication and innovation to achieve excellence in service, Quality,
reliability, safety and customer care as the ultimate goal.
 To earn the trust and confidence of all stakeholders, exceeding their expectations and
make the Company a respected household name.
 To consistently achieve high growth with the highest levels of productivity.
 To be a technology driven, efficient and financially sound organization.
 To contribute towards community development and nation building.
 To be a responsible corporate citizen nurturing human values and concern for Society,
the environment and above all, the people.
 To promote a work culture that fosters individual growth, team spirit and creativity
 To overcome challenges and attain goals.
 To encourage ideas, talent and value systems.
 To uphold the guiding principles of trust, integrity and transparency in all aspects of
interactions and dealings.

Board of Directors >>

 Shri Anil D. Ambani - Chairman

 Prof. J. Ramachandran
 Shri S. P. Talwar
 Shri Deepak Shourie
 Shri A. K. Purwar
3 Reliance Communications

LOOKING BACK, LOOKING FORWARD

Reliance – Anil Dhirubhai Ambani Group, an offshoot of the Reliance Group founded by Shri
Dhirubhai H Ambani (1932-2002), ranks among India’s top three private sector Business
houses in terms of net worth. The group has business interests that range from
Telecommunications (Reliance Communications Limited) to financial services (Reliance Capital
Ltd) and the generation and distribution of power (Reliance Infrastructure Limited).
Reliance – ADA Group’s flagship company, Reliance Communications, is India's largest private
sector information and communications company, with over 80 million Subscribers. It has
established a pan-India, high-capacity, integrated (wireless and wireline), convergent (voice,
data and video) digital network, to offer services spanning the entire infocomm value chain.
Other major group companies — Reliance Capital and Reliance Infrastructure — are widely
acknowledged as the market leaders in their respective areas of operation.

HISTORY OF RELIANCE COMMUNICATION

Late Dhirubhai Ambani had a vision of making tools of communication available to commoners
thereby allowing them to overcome barriers of mobility. Likewise, Reliance Communications is
capable of delivering services covering entire gamut of information and communication value
chain. Their products and services include infrastructure setting, applications and consultancy.

Brief history

Reliance Communications was set up as Reliance Infocomm in 1999 and from 2000 onwards
laying of optical fibers started in Maharashtra, Gujarat and Andhra Pradesh. Reliance Infocomm
was inaugurated in 2002 and first of interconnect (POI) was established in New Delhi in same
year. Also in that year, Reliance Communications commissioned their 1st optic fiber backbone.
In 2005, this company launched global roaming facility and CDMA services. Reliance
Communications was formed in 2006 and listed in Bombay and National stock exchanges.
Reliance Communications Limited founded by the late Shri. Dhirubhai H Ambani (1932-
2002) is the flagship company of the Reliance Anil Dhirubhai Ambani Group. It is India's
foremost truly integrated telecommunications service provider. With a customer base of over
36 million including close to one million individual overseas retail customers, Reliance
Communications ranks among the top ten Asian Telecom companies. Its corporate clientele
includes 600 Indian, 250 multinational corporations and over 200 global carriers and owns
and operates the world's largest next generation, IP enabled connectivity infrastructure,
comprising over 150,000 kilometers of fiber optic cable systems in India, USA, Europe, Middle
East and the Asia Pacific region.
Regarded as one of the foremost corporate leaders of contemporary India, Shri Anil D Ambani,
48, is the chairman of all listed companies of the Reliance ADA Group, namely, Reliance
Communications, Reliance Capital, Reliance Energy and Reliance Natural Resources.

He is also the president of the Dhirubhai Ambani Institute of Information and Communications
Technology, Gandhinagar
4 Reliance Communications

An MBA from the Wharton School of the University of Pennsylvania, Shri Ambani is credited
with pioneering several financial innovations in the Indian capital markets. He spearheaded the
country’s first forays into overseas capital markets with international public offerings of global
depositary receipts, convertibles and bonds. Under his chairmanship, the constituent companies
of the Reliance ADA group have raised nearly US$ 3 billion from global financial markets in a
period of less than 15 months.

Shri Ambani has been associated with a number of prestigious academic institutions in India
and abroad.

He is currently a member of:

 Wharton Board of Overseers, The Wharton School, USA
 Board of Governors, Indian Institute of Management (IIM), Ahmedabad
 Board of Governors, Indian Institute of Technology (IIT), Kanpur
 Executive Board, Indian School of Business (ISB), Hyderabad

In June 2004, Shri Ambani was elected as an Independent member of the Rajya Sabha –
Upper House, Parliament of India, a position he chose to resign voluntarily on March 25,
2006.

Select Awards and Achievements

 Voted ‘the Businessman of the Year’ in a poll conducted by The Times of India – TNS,
December 2006
 Voted the ‘Best role model’ among business leaders in the biannual Mood of the Nation
poll conducted by India Today magazine, August 2006
 Conferred ‘the CEO of the Year 2004’ in the Platt’s Global Energy Awards· Conferred
'The Entrepreneur of the Decade Award' by the Bombay Management Association,
October 2002
 Awarded the First Wharton Indian Alumni Award by the Wharton India Economic Forum
(WIEF) in recognition of his contribution to the establishment of Reliance as a global
leader in many of its business areas, December 2001
 Selected by Asia week magazine for its list of 'Leaders of the Millennium in Business
and Finance' and was introduced as the only 'new hero' in Business and Finance from
India, June 1999.
5 Reliance Communications

VISION OF RELIANCE COMMUNICATION

VISION

“We will leverage our strengths to execute complex global-scale projects to facilitate leading-
edge information and communication services affordable to all individual consumers and
businesses in India.
We will offer unparalleled value to create customer delight and enhance business productivity.
We will also generate value for our capabilities beyond Indian borders and enable millions of
India's knowledge workers to deliver their services globally.”
Reliance Communications is now among the three most valuable private sectors, Companies in
India and the five most valuable telecom companies in Asia. In the current Fiscal, Reliance
Communications will spend Rs 16,000 crore to further expand and strengthen its network
coverage across India and the rest of the world.
In addition to organic growth, Reliance Communications will leverage the advantages derived
from this impressive financial platform to explore and pursue any significant Opportunities
available in the telecommunications sector. "We are currently evaluating a number of inorganic
opportunities in select international markets to further expand our footprint," Ambani said.

Reliance Communication’s One India, One Tariff plan allowed millions to connect across India
at just one rupee a minute. The company was the first one to break the Rs 1,000 entry-barrier
with the launch of the lowest-cost classic brand handset at Rs 777. As per its expansion plan,
Reliance Communications will have the single largest wireless network in the world, covering
over 900 mn Indians or more than 15% of the global population. It will cover 23,000 towns
or every single Indian habitation with a population of over 1,000. Reliance Communications
will cover almost 100% of all rail routes, providing seamless voice, video, radio, and Internet
connectivity to 14 mn commuters every day. It will also cover almost 100% of all national
highways, and 84% of all state highways, giving millions of users the power to talk, text, surf,
play, chat or simply stay in touch across nearly the entire length of India's 2,00,000-km-long
road network. Having achieved tremendous growth, the main challenge for Reliance
Communications is to improve quality of service and ARPU. Its enterprise business is also not in
a position to compete with the global majors. Stock market valuations may boost the fortunes
of an entrepreneur, but Ambani needs to address the issues faced by the growing mobile
customer base, especially in India, where bureaucracy takes pride in checking the businessman.

CORPORATE PROFILE
Organizations, like individuals, depend for their survival, sustenance and growth on the support
and goodwill of the communities of which they are an integral part, and must pay back this
generosity in every way they can... This ethical standpoint, derived from the vision of our
founder, lies at the heart of the CSR philosophy of the Reliance – ADA Group. While we
strongly believe that our primary obligation or duty as corporate entities is to our shareholders –
we are just as mindful of the fact that this imperative does not exist in Isolation; it is part of a
much larger compact which we have with our entire body of stakeholders: From employees,
customers and vendors to business partners, eco-system, local communities, and society at
large.
6 Reliance Communications

We evaluate and assess each critical business decision or choice from the point of view of
diverse stakeholder interest, driven by the need to minimize risk and to pro-actively address
long-term social, economic and environmental costs and concerns. For us, being socially
responsible is not an occasional act of charity or that one-time token financial contribution to
the local school, hospital or environmental NGO. It is an ongoing year-round commitment,
which is integrated into the very core of our business objectives and strategy. Because we
believe that there is no contradiction between doing well and doing right. Indeed, doing right is
a necessary condition for doing well.

Highlights - At a glance
7 Reliance Communications

Chairman’s plans and commitments

Global

We are continuously investing in growth initiatives for businesses and customers that leverage
the power of these emerging technologies in new ways across the world.

Broadband

Our scalable Network leased lines supporting Single to Multiple links provide good potential for
Wide Area Network (WAN) bandwidth requirements, which are growing at rates exceeding
30% per year.

We have the largest hosting facility in India with 6 Data Centers aggregating to 2, 50,000
sq.ft and cater to more than 60% of content hosted in India. Web hosting and surfing has
become an important activity of every enterprise. Our competitive pricing, scalable managed
network services and hosting suites make us the most preferred choice in the Industry.

Value added

Our dynamic Telecom Services bundled with global reach Enterprise Business Solutions such as
Virtual Private Network, Bandwidth Aggregation, Hosting services, Managed Network Services
and Voice solutions; touch every enterprise constituent across the industries. Reliance Business
Solutions carve an edge for the Company. An Edge created though innovation, operational
excellence, cost leadership, effective communication and delightful customer experience.

Customer Support

Our retail presence of about 2,000 exclusive Reliance World and RCOM outlets on pan India
basis, serves as the smart front office interface for sales and service to our customers. Our
customer service is further supported by 24 X 7 ISO certified contact centre facility capable to
handle over 15 languages. Our International Contact Centre solutions provide virtual business
presence across the Globe.

Future Growth Drivers

While India is now widely acknowledged as the world’s fastest growing telecom market, it still
enjoys only around 20 per cent tele-density (wireline plus wireless), with nearly 70 per cent of
households unable to access any wireline telecom service. The prospects for growth remain as
robust as ever. To ride this enormous boom and retain our strong competitive advantage, we
have launched a whole new range of products and services – from feature-rich low-end
handsets to aggressive and innovative tariff plans. These path-breaking initiatives will not only
broaden our subscriber base but also offer our millions of customer’s real choice in both CDMA
and GSM networks.
8 Reliance Communications

New Initiatives

Entertainment

Our DTH and IPTV services, slated for launch later this year, will begin our journey towards
entertainment segment, which will use the power of our network technology in its roll out.
This will create new opportunities for us to deliver end-to-end experiences consolidating our
unique position in the industry.

Tower Infrastructure

Our pioneering efforts to tie up with other operators to co-lease space for passive
infrastructure on our towers have met with a huge positive response. Even as we formalise
these arrangements, we have also taken the lead in setting up and managing infrastructure
sites, and in providing mobile services in specified rural and remote areas of the country.

Technology and Intelligence Repository

We have recently launched Reliance Tech, an arm to garner and build technical knowledge
repository, which will serve as a strong platform for providing innovative solutions to high end
industry segments.

Cost effective measures

To improve our competitiveness and become even more cost effective, we are exploring the
joint venture route in managing our network services.

Growth strategy

We are well-positioned to build on our strength with convergent telecom businesses of greater
sizes. We will also continue to pursue new opportunities in high-performance convergent
unified communications, enterprise solutions and business intelligence.

Corporate Governance

We have adopted the Reliance Anil Dhirubhai Ambani Group Corporate Governance Policies
and Code of Conduct which has prescribed systems, processes and principles conforming to the
international standards, aimed at promoting the interests of all our stakeholders.

Social Commitments

The Company continued to contribute actively to community welfare activities and took up
several initiatives and measures related to education and healthcare.
9 Reliance Communications

Our Commitment

Our founder, the legendary Dhirubhai H. Ambani, gave us a simple mantra: to aspire to the
highest global standards of quality, efficiency, operational performance and customer care.

We remain committed to upholding that vision.

Dhirubhai exhorted us to think big.

We will think bigger. Indeed not just bigger but better, creating ever greater value for all our
statekholders.

Performance Review

Company has consolidated and improved its financial and operational performance during the
year. The salient features on a consolidated basis for the financial year ended 31st March,
2008 and comparison with period of 12 month ended on31st March, 2007 are:

• Net Profit After Tax of Rs. 5,401 crore (US$ 1,350 million) as against Rs 3,164 crore (US$
734 million) higher by 70.70%;
• Total Revenue of Rs. 19,068 crore (US$ 4,765 million) as against Rs 14,468 crore (US$
3,357 million) higher by 31.80%;
• Earnings before Interest, Depreciation/Amortization and other items of Rs. 8,199 crore (US$
2,049 million) as against Rs 5,721 crore (US$ 1,327 million) higher by 43.30%;
• Return on Net Worth for the year is 26.75% reflecting improved resource utilization;
• Earnings per Share of Rs. 26.32 (basic) and Rs. 23.22 (diluted);
• Net Worth of Rs. 25,461 crore (US$ 6362 million) – among the top three companies in
India; company enjoys the highest-credit-quality ratings of ‘LAAA’ for long term debt and
‘A1+’ for short term debt assigned respectively by ICRA
• A resounding re-affirmation of our unwavering and long-standing commitment to financial
prudence and conservatism.
Our robust financial numbers have enabled us to recommend an increased dividend of 15%.
10 Reliance Communications

Connectivity around the World

Around India
11 Reliance Communications

Business Mix >>

Services >>
12 Reliance Communications

Reliance Mobile >>

PAN India network and town coverage.

 80,000 kms of optic fibre backbone.

 Wireless network covering over 20,000 towns and 5 lakh villages and counting.

 15, 000 Base Transceiver Stations (BTSs) across the country.

 Network with superior reliability.

 All this managed from our state-of-the-art national network operations centre
in Mumbai.

Handsets >>
13 Reliance Communications
14 Reliance Communications

Reliance Calling cards >>

Reliance Global Calling Card

The Reliance Global Calling Card is available in a range of denominations to suit your
individual calling needs & budget. Using our Global Calling cards, you can make ISD calls from
any Reliance phone, be it postpaid (Reliance Mobile / Fixed Wireless phone) or Reliance
Mobile prepaid.

The Reliance Global Calling Card also gives you exceptional voice clarity and superior calling
experience, all at exceptionally attractive rates.

You can now enjoy attractive rates on our special Global Calling cards as per your varying
calling needs - US - Canada cards, Gulf cards, Singapore - Malaysia cards….etc!!

Reliance STD Call Card

The prepaid Reliance STD Calling Card offers very affordable rates for local and STD calls.
This is a rechargeable account-based prepaid card that can be used from Reliance phones
(Reliance fixed, fixed wireless and mobile – postpaid or prepaid) only and cannot be used
from a PCO.

With this card, STD calls can be made even an from Reliance phone which does not have an
STD facility!!

The card are available in a range of denominations to suit your budget & calling needs and is
available in Reliance World or Reliance Communications outlets as well as prepaid retail
outlets.
15 Reliance Communications

Reliance Hello >>

No wires attached

Get on the wireless connectivity bandwagon. And straight away become immune to cuts in the
cable, rains etc. Carry the set along with you when you move from one room to another or
when you shift your home/office.

Wireless Internet (Reliance Netconnect)

The Wireless Phone has an in-built modem for high speed internet connectivity. Surfat speeds
up to 115 kbps. What’s more, you do not need a separate ISP connection for operating the
set.

Mobile Phone's Features

Enjoy all the features of a mobile phone: SMS, In-built caller line identification, voice mail,
99-number phone book, speaker phone, a choice of many ringtones, etc.

City Mobility

You can use your Wireless Phone anywhere within your city and still receive and make calls, at
no extra cost.
16 Reliance Communications

Reliance Broadband

Audio Conferencing

Enterprise are going global. A given task needs skill sets that are not available at one place and
in one company. Travel is expensive, time consuming and tiring. Collaboration across time
zones has become a necessity.

No matter what type of meeting an enterprise needs to hold,Reliance's Audio Conferencing

Service offers you a plethora of features supported by expert service from our conference
managers.From having to access an instant anytime conference to working with our
knowledgeable staff who help you conduct a global investor relations call, you can count on
our feature rich audio conferencing solutions.

Leased Line

The most efficient and cost-effective way to connect two offices is a leased line; it provides a
clear and continuous channel between two end points. Little wonder that most large
enterprises use leased lines for connectivity. Reliance's 'end-to-end leased line' is delivered
through its state-of-the-art optic fiber network with its unique self-healing survivable
architecture.

With its 'fiber-to-building' approach, Reliance has reduced the last mile to just a few metres
of in-building copper cabling. Being mostly optic fiber-based, our network can offer reliable
and scalable services with a high degree of availability to our customers.

Ethernet Leased Lines

Reliance Ethernet Leased Line services can be used for the interconnection of Ethernet
networks between two or more enterprise offices.

WAN bandwidth requirements are growing at rates exceeding 30% per year fuelled by
bandwidth hungry real time network applications and business growth. Ethernet Leased Line
services offer the ease and scalability of Ethernet LAN technology across a wide area
communication network .Bandwidth is easily scalable from 1 Mbps to 1 Gbps on the same
interface, unmatched compared to traditional access technologies. Ethernet Leased Line
service supports both Point-to-Point and Point-to-Multipoint links.
17 Reliance Communications

Key Features of Reliance Ethernet Leased Line:

 Bandwidth options from 1 Mbps to 1Gbps,with steps as small as 1 Mbps

 Point-to-Point and Point-to-Multipoint connectivity
 Ethernet Interface
 SLA based service with QoS capabilities
 Ideal for Disaster Recovery and Business Continuity applications

Reliance Communications has deployed one of the world’s largest Metro Ethernet network and
has been pioneer in the area of Ethernet services. The Services offered are certified by Metro
Ethernet Forum

VPN

A network of one's own Reliance Virtual Private Network (VPN) is a private communications
network that can meet all the connectivity and remote access needs of an organization.
Designed specially for the enterprise customer, it offers a totally private, scalable and secure
network. VPN is the most effective way to achieve convergence of voice, video and data on a
managed network.

Wireless Data Virtual Private Network Solution (WDVPN)

Reliance WDVPN is a comprehensive CDMA 1 X based connectivity solution for secure, reliable
and high speed data transfer between remote terminals and the central application servers. It
allows remote terminals and mobile workforce to access the intranet servers such as ERP
applications, Email etc. without going to Internet. The customer servers can be located at
Reliance IDC or Customer Data Center.

The remote machine uses any of the CDMA devices such as Fixed Wireless Phone (FWP) /
Fixed Wireless Terminal (FWT), Data Card or built-in CDMA Module to establish a packet data
call with the RCOM network. Physical connectivity can be through the serial RS-232C port or
a USB port with the appropriate cable.
18 Reliance Communications

Video Conferencing

Business is no more conducted at one office and during office hours. Globalization requires all
enterprises doing business internationally and domestically across geographies, to collaborate. A
given job needs more skill sets than were required before and it is not possible to find all of
them at one place and in one company.

Collaboration is the mantra most large enterprises have adopted and they are finding it
increasingly useful. The challenge is to induct the right combination of collaboration tools that
can effectively help knowledge executives to exchange ideas and communicate in real time as
effectively as a face-to-face meeting.

Reliance next generation Video Conferencing provides enterprises an edge to collaborate

amongst their employees, business partners, suppliers, distributors, customers and other teams
across geographies and time zones.

Reliance Communications has redefined video conference service in this country taking it from
a conventional ISDN to higher bandwidth IP Video Call service with options to choose from
384 Kbps onwards to 2 Mbps or higher bandwidth. Our 242 IP Video Studios across 105
towns now help enterprises to extend the power of video collaboration to their smaller offices
across the country. They can also now use this medium to collaborate with their dealers,
distributors or even for interviewing candidates from the comfort of their office.
19 Reliance Communications

Overview
Reliance Data Center is a leading provider of outsourced data center infrastructure for
organizations with mission-critical IT operations. It currently has nine data centers in India and
nine data centers across United States and Europe. All these data centers are built on proven
world IT and facility platforms and an expertise that is recognized across the region.

We ensure customers to outsource their critical systems to us with complete peace of mind
and enable them to focus on their core business while we take care of their IT infrastructure
and other technology concern which is our core business, delivering secure, reliable, and
scalable hosting, network, application and consulting services to the customer.

Understanding that in today’s information age, secure data storage and zero downtime are
vital, our state-of-the-art hosting facilities provide the essential security, speed and reliability
to get you online faster and ensure your servers are up and running safely at all times. Besides,
we are a carrier-neutral data center supporting multiple ISPs, so you get to choose your own
carrier.

Beyond moderating your operating expenses, capital expenses and high stress risks, Reliance
Data Center was built to meet the highest standard for data center infrastructure and places a
great emphasis on service delivery and assurance with a support team that currently sustains a
consistently high 97% overall customer satisfaction rating. A personal touch to service that not
only is above standards today but also ahead of the curve of your future business demands.

With such a world class infrastructure and services, it is no wonder that we have more than
500 customers who have chosen us for co-location, hosting, connectivity and infrastructure
services. Customers include government agencies, enterprises, systems integrators, internet
service providers, banking and finance, telecommunications companies, Internet Exchanges,
media companies, manufacturers and hosting companies.
20 Reliance Communications

Reliance Business Solutions

>> High speed internet

>> Domain Name

>> Business email

>> Pc protect

>> Wi-Fi Networking

In today’s competitive environment, mere connectivity is not enough. It has to be

uninterrupted, error free, secure and efficient connectivity. Which is why, when it comes to IT
networking for growing companies and discerning customers like you, Reliance Wirefree
Broadband Internet is the right choice.

Reliance Wirefree Internet offers superior broadband experience and unmatched features like
capex free subscription based service, complete network and PC security solution, ease of
management for services subscribed over the web, and round-the-clock helpdesk for support.
In short it is one stop solution for all your communication & IT needs.
21 Reliance Communications

Company incurred total operating expenses of Rs 10,868.69 crore (US$ 2,715.81 million).
Operating profit before finance charges, depreciation and amortisation, exceptional items and
provision against fixed assets (EBITDA) The Company earned EBITDA of Rs 8,199.07 crore
(US$ 2,048.74 million). The EBITDA margin for the year under review is 43%.

Financial charges

Net finance charges were gain of Rs 399.70 crore (US$ 99.88 million). This was mainly due
to gain on foreign currency conversion and treasury incomes.

Depreciation and amortization

Total of such charges was Rs 2,805.26 crore (US$ 700.96 million).

Profit before tax

The profit before tax was Rs 7,076.29 crore (US$ 1,768.19 million). The provision for taxes
was Rs 283.62 crore (US$ 70.87 million). The net profit after tax was Rs 5,401.14 crore
(US$ 1,349.61 million).

Balance sheet

As at 31st March, 2008, the Company had total assets of Rs 77,459.34 crore (US$
19,355.16 million). Stakeholders equity was Rs 29,026.33 crore (US$ 7,252.96 million),
while net debt (excluding cash and cash equivalents) was Rs 9,825.02 crore (US$ 2,455.03
million), giving a net debt to equity ratio of 0.34 times.

Segment Wise Performance

1. Wireless Segment

Customer acquisition During the year, the Company added 18 million wireless customers (net
additions). The customer base grew by 64% during the year under review. As at 31st March,
2008, the Company had 48 million wireless customers on its network. During the year under
review, the Company reached out aggressively to rural areas on the back of a major network
expansion that contributed to the Company’s strong customer acquisition. The Company
consolidated its Classic brand as the second largest handset brand in the country. In addition,
the Company rejuvenated its handset portfolio by increasing focus on the LG brand, with a
series of offerings at progressively higher price points based on features. The Company has also
entered into Handset Bundled offers with leading handset sellers like Nokia, Samsung and
Spice. During the year, the Company continued to pioneer tariff innovations. In January, 2008,
the Company was the first to announce a simple and unified tariff structure of Re.1 on all
mobile calls. Again, in February, 2008 the Company launched a highly attractive price point for
its Lifetime proposition at Rs 299. ARPU: 340 minutes of use averaged Rs 460 per month per
22 Reliance Communications

subscriber giving a revenue of Re. 0.74 per minute. Nonvoice revenue was 6.68% of ARPU.
Even while overall voice revenue remained under pressure, our focus to stimulate revenue in
launching innovative tariffs, driving mobile usage and easy migration to prepaid, leveraged our
market position in the convergent telecom businesses.

Revenues and profit

Revenues for the financial year ended 31st March, 2008 were Rs. 15,213.54 crore (US$
3,801.48 million). EBITDA during the year was Rs. 6,084.09 crore (US$ 1,520.26 million).
Earning before Interest and Tax (EBIT) during the year was Rs. 4,125.10 crore (US$ 1,030.76
million).

2. Global Segment

Minutes of use ILD and NLD operations Operations in ILD and NLD maintained consistent
traffic growth rates, in-line with the growth of the overall market. ILD minutes of use annually
were around 7 billion. NLD minutes of use annually were around 23 billion. The Company
maintained its leadership position for ILD inbound India traffic with a market share of around
35%. During the year , Reliance India Call and Reliance Global Call achieved a milestone of
1.5 million international customers. Reliance India Call continued to be the largest retail service
with over 40% market share in the U.S.A. for India Calling.

Revenues and profit

Revenues for the financial year ended 31st March, 2008 were Rs. 5,475.06 crore (US$
1,368.08 million). EBITDA during the year was Rs. 1,403 crore (US$ 350.57 million). Earning
before Interest and Tax (EBIT) during the year was Rs. 837.12 crore (US$ 209.18 million).

3. Broadband Segment

We maintained our position as Premium Integrated Solutions Provider for Top Corporates in
the Broadband segment. Our Broadband business maintained its leadership in Centrex, Vitual
Private Network and International Data Centre products. The Company’s Broadband segment
continued to maintain its growth path and gained significantly during the year even in the
midst of aggressive competition in the data and voice segments, and especially in the internet
bandwidth segment, from many other telecom service providers. Of a current portfolio of more
than 35 products, our Broadband business has not only positioned larger number of products
within the top corporate but also increased its share of wallet. New products launched during
the year included One Office Duo, FMC VPN, Hosted Call Centre Solutions, Aggregated
Dedicated Internet Access, Telecommute, etc. Broadband’s innovative services assurance
model of “TechCheck” gained further impetus during the year 2007-08 in providing pro-active
feedback to its subscribers on the service levels provided by the Company. Customers have
rated Broadband Products and Services at a high customer satisfaction and delight rating.
Broadband’s Business IT Systems are ISO 27001:2005 Certified (an Information Security
Management System Standard).
23 Reliance Communications

Wireline

Our Optical Fiber Cable network with 1,17,000 + route-km in totality [inter-city + intra-city]
and Broadband provides eamless last mile connectivity. Our transport network is one of the
biggest networks in the world, having approx. 20,000+ nodes currently and Customer Base
Customer acquisition kept momentum with the increase in network coverage during the year.
Net additions during the year grew by more than 65%. During the year, the Company has
acquired close to 4,08,000 customer circuits, including approximately 2,98,000 voice lines
and 1,10,000 enterprise data circuits. As the Company’s Broadband business is currently
serving
mainly enterprises, the revenue per line reflects the total portfolio of services and solutions
being delivered to its customers. Our revenue per line has remained well above industry
averages, on account of our mainly enterprise customer base and our successful cross-sell of
services to our customers.

Revenues and profit

Revenues for the financial year ended 31st March, 2008 were Rs 1,786.73 crore (US$
446.46 million). EBITDA duringthe year was Rs 865.2 crore (US$ 216.19 million). Earning
before Interest and Tax (EBIT) during the year was Rs 626.28 crore (US$ 156.49 million).
24 Reliance Communications