RCom may shut wireless biz in 1 month due to 'creative destruction' by Jio

Mumbai: After suffering losses for consecutive quarters, debt-reeling Reliance Communications (RCom) is reportedly going to shut down major parts of its wireless operations in the next one month, citing “creative destruction” by Reliance Jio.

The Anil Ambani-owned telecom player, that is saddled with a debt of Rs 45,000 crore, is believed to have told its employees that their last date of employment will be November 30, said Economic Times. "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," Gurdeep Singh, executive director of Reliance Telecom told RCom employees on Tuesday, according to an audio recording available with ET Now.

Singh also said that the 'creative destructive' by Reliance Jio Infocomm was also a factor leading to the shutdown of the business as it crippled an industry that made business out of the voice call trade.

Reliance Jio has been offering voice calls practically free of cost and data packs at rock-bottom prices. This has had its impact on other players like Airtel, Vodafone, Idea, Tata Cellular also, with all incumbents terming Jio has a “disruptor”.

Reports of RCom’s shutdown surface after Tata Teleservices’ Consumer Mobile Business’s (Tata CMB) operations was sold off to Bharti Airtel earlier this month as the business was in a “bad shape”.

Apart from ILD voice, consumer voice and 4G dongle post-paid sectors, everything else will be shut down. Their DTH licence which expires on November 21 will not be renewed, marking their exit from the business, said Singh.

Earlier this month, RCom decided to call off its much-talked about merger with Aircel due to regulatory delays and legal uncertainties.

The tower business of RCom will remain operational since it is still making business. RCom is also in talks with Canada’s Brookfield to sell its stake in its tower unit. However, asset manager Brookfield will now have to pay less than the agreed amount for a 51 per cent stake in the company as RCom’s asset value dropped since the Aircel deal hit a dead-end.