RCom tells stock exchanges it’s no longer a mobile company
Reliance Communications (RCom) has sought to distance itself from the troubles in India’s mobile market by pointing out that it is no longer in the market.
In a statement to India’s two stock exchanges, company secretary Prakash Shenoy says that the company – which includes Global Cloud Xchange (GCX) – is unaffected by the mobile industry’s 21% annual decline in revenue.
RCom exited the consumer wireless business on 31 January 2018, he says. “RCom is no longer affected by the severe and prolonged wireless sector hyper-competition.” The company exited bankruptcy protection two weeks ago,
Meanwhile Bill Barney, CEO of RCom and GCX, told the Datacloud Europe conference in Monaco this morning that data centre operators increasingly need to own network and provide services in order to survive. “If you don’t fly in the network and server space it’s going to be very difficult,” he told the audience.
Shenoy points out in his letter that the overall market size has shrunk by “26,000 crore rupees on an annualised basis” (260 billion rupees or $3.8 billion). “The tariff wars between the incumbents, Airtel, Vodafone, Idea and the new entrant Reliance Jio, continue unabated, further dragging down all key financial metrics of the wireless sector.”
He says that RCom “has transformed itself into a pure B2B player”, now focused on “the stable enterprise communications services and the rapidly growing data centre space in India with over 35,000 B2B customers in India”, as well as its “global submarine cable business in enterprise data across continents, with over 300 enterprise and carrier customers worldwide”.
This means RCom now has only around 35,300 customers, says Shenoy in his letter. Until it exited from the consumer mobile business it had 120 million customers.
Shenoy’s letter – to the Bombay Stock Exchange and the National Stock Exchange of India – can be seen to promote RCom and GCX’s strategy, as outlined by Barney, of combining data centres and network as well as business services.
Barney pointed out at Datacloud Europe that the key area for investment in data centres was what he called “the emerging market corridor”, between the Middle East, India, and south-east Asia – exactly the area to be served by GCX’s planned Eagle cable.
RCom and GCX is understood to be considering a number of bids for the company, including two involving existing carriers.