I was indeed impressed by Reliance’s scale and grandiosity. Reliance WAS the darling of the media and stock exchange. However, splitting up the family’s fortunes was one of the stupidiest things the US educated MBA graduates could do. It got the whole dirty linen in public glare with the media houses rubbing their hands with glee.
Frankly, Anil Ambani is now facing a huge problem with raising funds- it’s under pressure to go in for an IPO. Would it be advisable to invest in this company? I wouldn’t risk my money here.
The biggest drawback in their strategy is that they are spreading themselves too thin. On one hand, there is imminent launch of Broadband (when?) and on the other hand Anil has moved in his men and money to enter the DTH platform. Arguably his IPTV and DTH are two competing platforms. This just doesn’t gel. (He’s also picked up couple of licences in recently opened FM radio segment).
Take DTH first. Last week saw him sign up the deal for DTH under the brand name “Bluemagic”. According to the license part, the DTH should be non discriminatory, i.e. the channel carried by one should be available to the rival platform. Then, the set top boxes should be interoperable. This gives the real choice to consumer. Assuming that there is nothing wrong here, some dingbat has finally had sense to frame the correct rules. Given the pace at which Anil is amassing content, it would make sense for him to lock it down only through the IPTV platform he proposes to reach out.
Is the DTH a stop gap arrangement till he reaches the critical mass to sustain IPTV and Broadband? The answers aren’t forthcoming. As for the Internet Protocol based Television (IPTV), this technology has been sucessful in couple of countries. Notably US (TiVO) and now spreading across UK. Arguably, there are few sucess stories here. Yet, there is a whole gamut of licensing restrictions, content and backend for teleshopping as planned. There has been no news in the media as to how all this would be managed. Then of course, the cost of the set top boxes and a huge hassle of piracy. What would stop anyone to copy the content, covert it to torrents and seed it via Reliance’s own broadband network? Would the channels be encrypted and scrambled? The whole cost of setting up the retail and distribution outlets, cost of training the ubiquitous “executives” and customer redressals. Including the network to set up for collection of fees. Revenue sharing with the content providers et al. Well, last but not the least- the last mile access; proverbial holy grail of telecom operators.Let’s see how this foray works out in the future. I am beginning to believe that Anil Ambani has hired the same set of retrenched Tata advisors who lead it to doom! See it for yourself. Ever since Tata decided not be the “also ran” of the telecom rat race, it has notched up some impressive gains. Well, it said so according to it’s press circular. I have no way to confirm these claims.
Secondly, Anil Ambani plans to enter the health care segment. Reliance health sciences was providing it’s services for lab diagnostics. I believe that they even had created stem cell lines (hi tech stuff). However, Anil is now eyeing the lucrative health retail sector (pharmacies or even hospitals). Reason? Profits. Obscene profits. The medicines have a mark up price of 1000-5000% . I am not exaggerating. That’s the reason why the other pharma majors are in the hospital segment because the branded drugs gives them a steady source of income.
Coming back to Anil Ambani- he has yet to prove himself in the telecom market. It’s possible that he’s collecting stray bits and the then go for the big bang. It recently introduced 3 years incoming for mobile phones- in response to Tata’s 2 years free incoming. A sad reflection for a company that till recently dictated the terms for affordability and plans that forced all others to cut back prices to retain customers.
The new year may bring forth good news for us customers. If of course the promised 100mbps speeds materialise. His right hand man Amit Khanna is very effusive personality- as so it appears from his columns. I believe that instead of conjuring up dreams, it’s more important to get some action on ground.
Before I end, I must admit that Reliance has an excellent hold over media. Perhaps no one talks about him or his ventures with the crtique it’s needed. He’s inherited the art form from his father who “used to manage the environment”. The exact details elude me but Reliance had forayed in some business publication in around 70′s or 80′s. The venture failed but gave them valuable lessons in media management.
Is Anil planning to be the next media mogul?
This content is published under the Attribution-Noncommercial-Share Alike 3.0 Unported license.
Related posts:
- Anil Ambani moves in Reliance is making news. The “A” team has been announced recently Prominent among them is Gautam Doshi. The most prominent...
- Paid for Media Exposure in India Paid for Media Exposure in India Is there a paid media exposure? I had alluded to the same in one...
- Paid Media Exposure by So-Called Broadband Giants Paid Media Exposure by So-Called Broadband Giants I came across this write up in Financial Express today on Sify. I...
- VSNL and Reliance at loggerheads Anil Ambani is known for his hands on approach. Expect more fireworks in the coming days. Anil fiired first salvo...
- Snippets from the Telecom Situation in India Snippets from the Telecom Situation in India At the height of the Reliance imbroglio, the brothers has split apart and...
- Disappointing role of media in reporting Indian Telecom Disappointing role of media in reporting Indian Telecom Often I have wondered the purpose of this telecom Blog. Over the...
- Behind Reliance Few details have trickled out in the media. Thats the testimony to the fact that these brothers have an iron...
- Boom! Anil Ambani knows how to do it in style. After Reliance created a mammoth infrastructure for Telecommunications- aiming for being...
- Reliance Infocomm. Where is it headed? Admittedly, it has come much under the scanner for all the wrong reasons. Call rerouting, CBI enquiries et al. Plus,...
- Media “activism” part 2 In continuation with my post on...
[...] On a similar plan is Anil Ambani’s foray in the media business.On an earlier write up I was wrong to assume that Anil Ambani had spread himself too thin. In a later post, I had quoted from a Business Standard article which detailed Reliance’s multi crore ambitions for being the next media moghul. [...]
[...] many complaints they have not rectified the same). Read it and then read the entry on this blog here. It only goes to prove that what I write today becomes the news for [...]