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General News RCom to shut down its wireless business in next 30 days: Report
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Reliance Communications (RCom) is reportedly shutting down major parts of its wireless business owing to lack of profitability. 30 days from now, the company is expected to shut down the segment, and the employees have been given November 30 as the last day of the employment.

ET has acquired an audio recording of Gurdeep Singh, executive director of Reliance Telecom, who was also the CEO and co-CEO of the mobility business, in which he talks about drawing the curtains at important segments of wireless business. ”We stand at a situation where we need to call it a day on our wireless business and this would bring the curtains down on our wireless business 30 days from now. And as a result, we tried whatever means to sustain and put oxygen in the business but we will not be able to sustain the business beyond 30 days from now,” Singh is believed to have told the employees.

According to the said recording, Singh says, “Segment wise – ILD voice, consumer voice and 4G dongle post-paid will be migrated to enterprise as long as it is profitable. But besides these three, everything else will be shut down. We have published in newspapers that as our DTH license is expiring on 21st of November and we are not renewing license. So that will also mark our exit from DTH business. So that is restructuring of overall wireless and consumer business”.

It is worth mentioning that the authenticity of the audio recording is yet to be verified. BGR India has also reached out to RCom to ascertain the truth.

The report further says that the restructuring would not impact the tower business which is bringing business, and will remain operational. RCom is said to be in talks to sell its stake in its tower unit to Canada’s Brookfield. The company is further planning to shut down its 2G operations, close its low average revenue per user (ARPU) generating subscribers, and focus squarely on the profitable parts of the 3G and 4G services to cut down on losses. These services are likely to be housed under the enterprise business.

The shutting down of the business unit is attributed by Singh to a number of factors including the killing of CDMS business, delayed Sistema Shyam Teleservices merger, and the canned merger with Aircel. In addition to this, the commercial launch of Reliance Jio is also believed to be the cause of the destruction of incumbent players including RCom.

According to the report, RCom is undergoing a strategic debt restructuring program. The merger with Aircel combined with its stake sale to Brookfield were crucial to this plan as some Rs 25,000 crore of its Rs 47,000 crore debt was expected to be cut down. However, with the Aircel merger stalled and the Brookfield deal undergoing renegotiations, the latest move could be part of the telecom operator’s alternate plan. The company had earlier said that sale of tower, fibre, spectrum, and real estate assets, could help generate over Rs 25,000 crore to repay lenders.

Source:
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Airtel Digital HD Recorder / Kerala Vision Digital TV
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