Reliance Communications has become the first telecom company to get approval to offer GSM and CDMA mobile-phone services nationwide. Currently R-Com is the No.2 mobile services firm in India, providing CDMA services in 21 circles and GSM services in 8 circles.

The licence has been awarded in accordance with the Unified Access Service Licences and the approval is for providing GSM services in their respective circles. Other two companies to get approval are HFCL (Punjab) and Shyam Telecom (Rajasthan).

And within hours of receiving the approval, the Reliance also paid Rs.1651 crore to DoT as spectrum fee and prepare the network in 4-6 weeks. However, spectrum is likely to be allocated by March 2008 and Reliance may launch its services only in financial year 2008-2009.

»

In yet another instance of clash between the Ambani brothers, Anil Ambani is venturing into retail business using the strength of Reliance Communications’ mobile phone network which has 3.5 crore subscribers.

The venture would be known as ‘Mobi-Retail’ and would be launched in over 1000 towns in the initial phase. The mobile phone would act as the interface where once can choose from over 100,000 products.

ADAG would also leverage on its other outlets of Reliance World, Reliance World Express, Reliance Money, Reliance Insurance, Big Flicks, and Adlabs, which would act as delivery points for home delivery or pick up.

Reliance Communications would offer different formats such as Mobi-HyperMall (for all products), Mobi-Mall (mini hypermarket), Mobi-Store (neighbourhood stores), Mobi-Fresh (vegetables), Mobi-Groc (groceries) and Mobi-Express (regular products).

The response for the venture is doubted since there is lack of ‘touch and feel’ experience. Also, browsing of products through mobile would be difficult to access and time-consuming as compared to shopping in traditional format or through Internet.

Though, the margins are likely to be better off as the investments in such format is much less than the traditional model.

But the venture may not go down well with Mukesh Ambani’s Reliance Retail, as for even mobile retail, the company needs to have a sizeable operations for stock, warehousing, delivery and other retail operations. via

This one would surely not call for any opposition, even though it is integrated with the retail business. If implemented, Reliance Industries could bring about a sea change in the basic healthcare infrastructure of the country.

It plans to invest Rs. 25,000 crore by 2015 to setup 1500 primary healthcare centres in B and C class towns, which will also have facilities required by the locals to sell their goods.

The healthcare model would be most likely to be based on the existing primary healthcare centres of the government, which is universally known for poor service standards in rural areas.

The venture raises certain questions as to whether it fits into the corporate responsibility or there is some business into it. Probably, owing to opposition in retail, Reliance wants to divert the attention to the social benefits through this venture.

Also, this might also not be in direct confultation with ADAG’s Reliance Health, since latter wants to set up big hospitals and pharmacy chain rather than catering to the basic strata of the society. source

Reliance Industries is planning to rollout out a nationwide optical fibre network measuring upto 7000 kilometre at a cost of around Rs.800 crore. Through this network, Mukesh Ambani wants to connect its refineries, pipeline network, retail outlets, petrol pumps and logistics biz.

Reliance Industries earlier built a nationwide fibre optic network but after demerger, it was handed to Anil Ambani. And as per non-compete clause, Reliance Industries cannot enter telecom till 2015.

As such Reliance may rope in a third party to lay the network. Market sources estimates HFCL to be the frontrunner, as such it’s share price jumped up on the stock exchanges.

Through this venture, Reliance would gain through better communication and real time data interchanges. It would also reduce its dependancy on other companies like Bharti and BSNL.

Reliance Industries could also use this as a long term strategy by drawing synergies from its businesses and improve its infrastructure setup. via

Anil Ambani’s financial services arm R-Money has entered into the area of retailing gold coins. Currently, most of the existing players like ICICI Bank, Tanishq and HDFC Bank retail 5 gm and 8 gm coins but ADAG would be introducing half gram and one gram coins to reach a wider customer base.

Last year, around 80,000 kg of gold coins were sold in India, of which ICICI Bank had a share of over 3% while Tanishq was a little over 1%. R-Money expects to match ICICI’s number this year itself.

For distribution, Reliance Money is using its existing sales network, plus all Reliance Webworlds and Reliance Communications outlets. It has also tied up with TV18’s home shopping network, Homeshop 18 for selling gold coins.

This would mean that Reliance Money would increase its distribution network as it can Homeshop 18’s entire viewer base. For Homeshop 18, it would mean a wider product base for its customers.

The diktat has worked yet again. Much after opposing entry of foreign retailers, the UP Government has now decided to shut down all organised retail outlets that operate outside malls. As a consequence all Reliance Fresh and Spencer retail stores are closed in the state with immediate effect.

It is simply incomprehensible, and goes beyond the principle of economics. Industrialists who have invested crores outlining their investments, have to shut down their stores overnight for reasons which are still not known but can only be attributed to political gimmicks.

After Left and DMK ruled states, Mayawati has done an unthinkable. In our opinion, it’s just a strategy to kill many birds with a stone. Since the attack on Reliance Fresh stores was carried on by an SP leader and not even in wildest of imagination would BSP support any move of SP.

It seems that Mayawati’s brush with Ambani’s continues as after Anil Ambani’s proposals, its turn of Mukesh Ambani to feel the brunt. The decision may be more prompted with the expectations of an early poll as no party would like to ignore the small traders and farmers.

»

The Indian film industry is attracting big ticket investment with corporate houses turning focus on film production. After Yashraj Films, UTV, TV18 and PVR, Reliance ADAG is investing big in film production.

Reliance ADAG group’s entertainment company, Reliance Entertainment has created a new subsidiary, Big Motion Pictures Ltd. which will produce 40 Bollywood films in next 2 years with an investment of Rs.500 crore.

Currently ADAG owned Adlabs produce movies but now it would be totally concentrate on film processing and exhibition through its multiplex chain.

Anil Ambani is also converging its telecom and entertainment business by setting up VCD and DVD outlets in its Reliance WebWorld outlets. 
 
With Bollywood attaining global status, exhibition industry on a boom, demand for big budget films with big banners is increasing; as such entry of corporate players could influx the required capital in the otherwise risky investment of film making.

Also, with planned entry into TV broadcasting business and introduction of news channels, film making would form a perfect fit to leverage on strength of the group’s other entertainment businesses. via

Anil Ambani’s Reliance Communications is looking at acquiring a controlling stake in Aircel Cellular Ltd. by buying out stake from Malaysian company Maxis Communications, who hold 74% stake and possibly from promoters of Apollo Hospitals who hold remaining 26%.

Aircel’s main operations are in Tamil Nadu and Chennai circles while it has got licence for a pan-India rollout. This make strategic fit for Reliance Communications as it can GSM licence and the necessary spectrum. It could also divert its slow growth rate in CDMA business in comparison to other GSM players.

For Maxis, it could mean getting a partner which has a national presence, strong brand, professional management and established infrastructure.

TRAI is also expected to allow for free competition, removing the 10% ceiling for a mobile firm to hold stake in companies in a single circle. It is also expected to allow for running both CDMA and GSM services under the same operating licence.

However, given Aircel’s lesser known brand name nationally and scale of operations, it may command lesser premium as seen in the recent Hutch-Vodafone deal. Also, given unclarity in Reliance Communications plans for GSM business and unstable guidelines, it may be a while before the deal actually takes place. Source

With the launch of Reliance Mart in Ahmedabad, probably Reliance’s biggest bet in its retail venture, the company is all geared to shake up India’s organised retail plans with its slew of investments and strategies.

Reliance Mart in Ahmedabad is India’s largest hypermarket, spread over 1.65 lakh square feet offering 95,000 products in various product ranges consisting primarily of Reliance’s private labels. The most striking feature is the Rs.195 denim jeans something akin to Wal-Mart’s highly successful $10 jeans.

Other unique offerings of RelianceMart include tailoring, shoe repair, watch repair, a photo shop, gift services, laundry services, fresh bakery, ice-cream train for kids, ready-made batter, loose tea and pickles.

In the hypermarket space, Reliance faces competition from Pantaloon’s Big Bazaar, RPG’s Spencer’s Hyper and Tata’s Star India Bazaar. But considering the national reach and area occupied, Big Bazaar is the only real threat to Reliance Mart in the near future.

»

If you are thinking that there is very little left in terms of appreciation in Reliance Industries especially the stupendous returns it has given post demerger and split with Anil Ambani, then there is some food for thought. Leading brokerage and equity research company, Morgan Stanley has projected the share price of RIL to rise 35% from current levels in 1 year.

If such happens, then the market capitalisation of Reliance Industries will rise from current $64 billion to $100 billion, making it the first Indian company to achieve this feat.

The 30 companies of Sensex together have a market cap of around $500 billion while those of entire listed companies in India is around 41 trillion. In comparison the 30 constituents of Dow Jones Industrial Average have a m-cap of over $4 trillion with Exxon Mobil being the most valuable with a market value of $485 billion.

The report states that the prime drivers for increasing value of RIL would be the increase in reserves for exploration and production business, improved refinery performance, new gas contracts, higher global refining margins and setting up of pan-India retail network. On the flip side, the risk are cut in import tariffs, rupee appreciation and delays in execution of business plans.