Business Today

The New Telecom War

Business Today editor introduces the latest issue of magazine.
twitter-logo Prosenjit Datta        Print Edition: December 20, 2015
Business Today Editor Prosenjit Datta
Business Today Editor Prosenjit Datta

Sunil Bharti Mittal did not start off in business as a telecom entrepreneur - in fact, he experimented with several other trading businesses before he got around to his telecom foray. But he has built India's largest and the world's third-largest telecom company. With operations in India and 17 African countries, revenues of $15.1 billion, and a customer base of 316 million people, Bharti Airtel is a formidable player for any telecom rival. Though the Bharti Group has interests in finance, agri business and retail, it is telecom which is the jewel in the crown of Sunil Mittal.

India's richest man Mukesh Ambani, Chairman of the $62.2-billion in revenues Reliance Industries, plans to be the biggest telecom player after launching Reliance Jio, his 4G play. This is not the first time that Mukesh has tried to become a telecom leader. In 2002, before the division of assets of the Reliance empire between Mukesh and Anil, the then undivided group had launched a major play in telecom - Reliance Infocom. By all accounts, Mukesh was keenly involved in the telecom venture. But in 2005, Reliance Infocom went to Anil Ambani and the two brothers signed a non-compete agreement, which saw Mukesh stay off the telecom turf.

In 2010, the Ambani brothers decided to scrap the non-compete pact, and Mukesh entered telecom in a big way - buying out Mahendra Nahata's Infotel, which was the biggest buyer of spectrum in the 4G auctions the same year. Since then, Reliance has invested an estimated $15 billion in the telecom project, which will launch its 4G services shortly. Reliance Jio has partnered with Anil Ambani's Reliance Communications, and a number of other companies as well to make sure that his 4G services offer unparalleled experience from day one. Reliance has bought one of the big media groups in the country - The Network18 Group - to ensure content for his 4G services, and is working with a number of handset manufacturers to offer his customers special rates and choices.

Meanwhile, Sunil Mittal's Bharti emerged as the second-biggest buyer of 4G spectrum in the 2010 auctions, but it has already launched its services in 296 towns. It is aggressively wooing new customers as well as offering upgrades to its 3G customers to lock them in.

The 4G networks are promising to revolutionise data speeds, and ways of doing business, though 3G had held the same promise when it was first introduced. While 3G flattered to deceive, everyone expects 4G to live up to its promise because of the amount of money that has been already invested.

There are other players in the 4G fray - Vodafone and Idea Cellular, who are planning their own 4G services, but initially the big fight will take place between Bharti Airtel and Reliance Jio. Both are formidable players and both are using very different strategies in the 4G market. One will emerge as the clear winner, and the battle is expected to redefine the contours of the telecom landscape in the country.

Associate Editor Manu Kaushik and Senior Editor Nevin John look at the strategies and calculations the two players have made in the coming 4G battle. Read about it in our cover story which starts on page 62.

This issue also contains a number of other interesting stories. On page 24, we look at how the government is planning to increase its tax base - and the hurdles in the way. On page 50, there is a story on another war brewing - this time in the burger market. And then there is the story about how scooters made a comeback in the two-wheelers market, after having gone off the radar for many years. That is on page 86.

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