There is a larger than life creation of Dhirubhai Ambani and Reliance seems to be creating this image of a person who created “magic” out of no where. In the pure play capitalistic markets, this larger than life image justifies the old adage: Making money i where the ends matter and not the means.

With the institutionalised corruption firmly in place, Reliance was able to throw in money and automatically have all the doors opened for itself. The top “honchos” drive their interaction based on loads of PR crap and “behind the scenes” activities to give shape to their bulging coffers. Investor driven companies like Reliance has been quick to spot oppurtunities where none have existed earlier on.

The post was motivated when I watch the movie “Guru” starring juniour Bachchan and his muse (current fiance) in a total waste of a role. Bachchan, of course, tries to set up a larger than life role falling flat on his face and is an apology of an actor. However, purpose of the post is not to pan the movie here. The imediate provocation was the three series article that appeared on Rediff where Mukesh Ambani talks of his “father’s dreams”.

Reliance’s venture in Telecom was audacious. With a rumoured investment of 25,000 crores it was unparalleled simply for the scope for it’s plans and promises. We were “promised” Mbps speeds, free outgoing calls, “death of distance”. Arguably, they did shake up the industry and even forced the goliath of BSNL to move it’s lazy butt and reduce the call distances. For the first time in Independence, we were actually “experiencing” the “fruits” of free market economy.

However, the honeymoon lasted briefly. With the passing away of the patriarch, the sons squabbled like any “galli-mohalla”fights and the whole boo boo was the subject of national past time. Of course, the only interest was the huge amount of money at stakes here. Couple of billion dollars here and there. Rolls Royces, private jets, extensive land holdings and money beyond your wildest dreams.

Here is something that Mukesh himself had to say about it all in the second series of the article write ups:

We got into telecom in the ’90s by bidding for cellular licences. But I felt that the real value is in the convergence of information and communication; pure communication will not deliver a sustainable value; that is why we called ourselves infocomm. It was learning a whole new domain. We brought in experts from the outside but we essentially did it with proven Reliance people.

It is all very obvious down the line. The billing cycles were screwed up. People were cheated. Opaque schemes were floated. Reliance got in the mobile business by circumventing every possible rule in the book. Licence norms were actually changed for them. Their broadband venture has failed. Their customised portals (in Reliance Web World) remain under utilised by over estimating the pent up latent demand for connectivity. If I am not mistaken, it is bleeding cash with no where to go.

Anil Ambani seems to have divided his attention towards politics and entertainment business. He is looking for the scale up of his telecom business and get into IPTV by signing up a deal with Microsoft. All the while giving a go by to cheaper oppurtunity of getting in to Open Source alternatives. Expect him to seed the market with dirt cheap Chinese set top boxes once his DTH business gets off the ground. And in contravention to all the rules, they are marketing their unlimited “broadband” as speeds of 150kbps.

Here is another first from the morons who are manning the “broadband”:

Subscriber’s experience of the Internet may vary depending on PC configuration, Internet performance beyond the Reliance network, and/or on the website or server being accessed.

Reliance remains a sore disappointment. A larger than life image of the company has been fuelled by the media which makes no sense in the present context. The promises that they made and what they have delivered has a stark contrast.

The similar argument can be extended to Reliance’s polyester business. Apart from the scale, they have not let any company rise in competition and are the monopoly. As a result it puts them in enviable position to command any price they need. Telecom is a different ball game altogether and I am sure that the smart people in Reliance would not have foreseen the unique challanges in the fragmented market and challange the dominance of another major player- Airtel.

I am glad that so far Sunil Bharti Mittal has not had the ego impulses to pen down his own biography and then buy it through proxy to drive up it’s sales! The last word in Reliance’s coffin has not yet been written and to make themselves meaningful to any extent, they would have to drive and scale up in Broadband- which is the future as far as communication is concerned. We would be moving to a wirefree world where data chunks matter the most. It has landed itself in an enviable position after buying up Flag Telecom. It is squandering and frittering away it’s home grown advantage in doing basically nothing.

No longer an enigma at all.  

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Tags: Airtel, Anil Ambani, API, Broadband, BSNL, Chinese, Corruption, DTH, Internet, IPTV, Media, Microsoft, Mobile, Open Source, Politics, Rediff, Reliance, Sunil Bharti Mittal