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RCom could shut down mobile operations within a month

RCom could shut down mobile operations within a month

Reliance Communications (RCom) is reportedly mulling over whether to shut down some or all of its wireless operations.

Gurdeep Singh, executive director of Reliance Telecom and CEO of the group’s wireless business, was quoted in India’s Economic Times as saying that the operator had reached a point “where we need to call it a day on our wireless business” and suggested that the operator would reach a decision on this within the next 30 days.

While the quote is pulled from an audio recording of a speech made by Singh, the suggestion that RCom could entirely shutter its wireless business is not entirely consistent with points made elsewhere in the ET’s article, as well as other reports on the issue. In addition, ET noted that it was unable to “independently verify the authenticity of the audio recording” and that RCom had not provided any further comments.

The ET noted that “people familiar with the matter” have claimed that RCom is set to shut down its 2G operations, essentially divesting its lowest ARPU subscribers, in order to focus on the profitable elements of its 3G and 4G operations. However, as the company’s enterprise unit could assume control over these, there is the possibility that its dedicated wireless unit could be shuttered.

The report that RCom could shut down its 2G operations was corroborated by local publication The Hindu, which claimed that the unit would close by 30th November with customers being upgraded to 3G and 4G tariffs, according to sources claiming to be “close to the developments”.

Singh was quoted as saying that “ILD voice, consumer voice and 4G dongle post-paid” would all transfer to enterprise “as long as it is profitable”, but added that “aside from these three, everything else will be shutdown.”

He noted that the operator’s DTH broadcast licence is due to expire on 21st November and would not be renewed. RCom’s mounting troubles include fierce competition brought about by the “creative destruction” of Reliance Jio’s market entry, as well as the collapse of its proposed merger with Aircel.

“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,” says Singh in the recording.

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