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RCom separates GSM and CDMA units

Indian operator Reliance Communications (RCom) is reportedly restructuring its operation. Most significantly, it is believed to be splitting its GSM and CDMA units, with the latter believed to be in line for a sell-off that would help to reduce RCom’s debt.

The operator’s CDMA unit, which has been flagging for some time, will reportedly be headed by CMO Nilanjan Mukherjee. The growing GSM business meanwhile will be overseen by newcomer Ramesh Menon, a former regional head at Bharti Airtel. Both units are under the aegis of wireless operations head Gurdeep Singh.

With the business outlooks for each of the units increasingly different, the two operations required independent strategies. The restructure will reportedly encompass the creation of regional management teams to develop more specific, decentralised strategies.

RCom originally offered services exclusively via CDMA but added GSM to its offering when legislation was changed to allow this in 2008. With around 80% of mobile phone subscribers in India using GSM, the company is attempting to shift its voice operation towards this technology so that the CDMA spectrum is free for data.

Since CDMA technology is increasingly better suited for data rather than voice, an operator looking to launch 3G services could be interested in acquiring RCom’s CDMA spectrum and assets. The CDMA licence expires in 6 years.

Reliance has a substantial debt of around Rs 41,170 crore, and is considering selling off several units including its satellite TV business. While thus far its planned selloffs haven’t come through, it has reached an infrastructure sharing agreement with Reliance Jio Infocomm.

 

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