It may be a good news for Ruias who hold a stake in Hutch Telecom. Their windfall would be in billions, if at all they decide to sell their stake. By all possible indications, Anil Ambani is keen on buying out Hutch’s stake and propel himself to the “top” of the heap. It would give him a ready access to the GSM subscribers.
In my opinion, if I am right, Ambani would drive his CDMA in the rural hinterland given the price advantage that CDMA can afford. GSM would be his mainstay in the cities- the erstwhile Hutch driving his brand strategy. Plus give him access to the lucrative Mumbai market with a ready made subscriber base.
Airtel’s Mittal doesn’t want to loose this golden goose and wants to convert Hutch into another crappy service provider called as Airtel. It is all about the subscriber base isn’t it? Millions and millions? I am sure that the valuation would be far less than that is being reported in media. Media of course, has it’s sources but then one can never trust them. Hence, there are wild figures being quoted; in the range of billions.
The excat quantum of payments made would perhaps be never known. These are private companies and their shares are not publicly traded.
Ruias ran ESSAR steel which ran in debts. They were another wannabe big shot industrialists who just happened to invest in telecom as an afterthought. It clicked.
Why is it a bad idea for Hutch to be sold off?
I believe that it would create very strong oligopolies. As it is the companies don’t give a hoot to TRAI, the so called regulator. Further, these oligopolies would resist any consumer friendly initiative. Primarily, number portability. They would see the churn and shift of the subscribers would need additional investments hurting their “profits”. Ambani, like a rampaging maniac, would turn this company into another ‘reliance’ and make a mess of it.
I believe that Government should step in and avoid any sale in the best interests of the subscribers. I believe that the subscribers should have a say as to whom they would want to manage their affairs. We are just quoted as ‘numbers’ and nothing else. A price to be paid for.
On an afterthought. What would be Hutch’s communication strategy post sale to any other company? I would surely miss the pug. Imagine Ambani claiming that it was his “papa ka sapna” (father’s dream) or Amitabh’s voiceover crowing about what Reliance has done. It would be a sorry state of affairs for a company that had the potential to make itself better but screwed it up with lousy plan intiatives.