Reliance Communications Bankruptcy: End Of An Era For Anil Ambani From 2002 To 2019

There was a time when Anil Ambani’s Reliance Communications (RCom) disrupted the telecom market in India when it launched the cheapest mobile service of 15 paise. He was the market leader in the telecom and it looked like there was no one to dethrone him from his position. However, how the fortunes of an individual take a tumble can be learnt from the journey of Reliance Communications. The brand which was a household name has now shocked the entire world by filing for bankruptcy. The announcement had a rippling effect on the stock market as the shares of the company fell over 50% to Rs 5.40. So, what went wrong with RCom that was once a shining star in the telecom industry is now seeing its darkest era? Here is a brief look at the history of Reliance Communications from its success to filing for bankruptcy.

Reliance Communications Company History: The Rise and Fall of Anil Ambani

• Year 2002: After the death of his father Dhirubhai Ambani, Anil Ambani starts operations under unified Reliance Industries Limited (RIL) by launching the Code Division Multiple Access (CDMA) technology for the mobile phone that was considered superior than the Global System for Mobile (GSM). He rolls out Monsoon Hungama Pack that offered free incoming calls at the time when the mobile operators used to charge for the incoming calls.

• Year 2006: Split between the two brothers i.e. Anil Ambani and Mukesh Ambani takes place and the name of the company is changed to Reliance Communications from Reliance Communications Ventures Limited.

• Year 2007: Reliance Communications enters into the mobile handset industry by launching attractive and affordable handsets between the range of Rs 700 to Rs 800. This move by the company proved to be a great masterstroke as it not only helped Anil Ambani to cement its position as a leader in the telecom space but also halved the prices of the mobile handsets in India.

• Year 2008: Reliance Communications enters into the partnership with the Alcatel-Lucent, U.S-French company engaged in the production of telecom equipments. The main objective of the partnership was to offer the network services to the various service providers operating in the country

• Year 2009: The company decreases the call rates to Rs 0.5 a minute that led to the stiff competition among the mobile operators in India with regard to offering the cheap outgoing calls. In the same year, he came up with 1 paise per SMS for both the CDMA and GSM customers.

• Year 2010: Reliance communications launches 3G services in India.

• Year 2011: The company with an objective to provide the better internet services to the people launches the mobile portal, which was known by the name ‘R World’.

• Year 2012: The company enters into an agreement with WhatsApp, a cross platform mobile messaging application with a view to provide the application to the users of the GSM prepaid plan.

• Year 2013: Signs deal with Jio for the purpose of sharing optic fiber and telecom towers. A deal is also signed between the Reliance Communications and Ericsson worth USD 1 billion for the purpose of managing the wireless services contract for the North and West India.

• Year 2014: For the objective of controlling the mounting debts, the company splits the GSM and CDMA business.

• Year 2015: Engages in the activity of selling the non-core assets for decreasing the ever-increasing debt.

• Year 2016: Signs spectrum sharing deal with Jio, the Indian mobile network operator.

• Year 2017: The deal with the Aircel for the purpose of merging wireless business collapses. Anil Ambani takes the decision to shut the wireless unit. On November 30, the company shuts down its 2G and 3G operations.

• Year 2018: The shareholders of the Reliance Communications approve a cap of Rs 50,000 on the borrowing limit of the company.

• Year 2019: Reliance Communications files for insolvency through the National Company Law Tribunal (NCLT).

End of the Glory Days for Reliance Communications

With the announcement of the Reliance Communications bankruptcy, there is story to be learnt, which is to go hand in hand with the latest technology. Failure to do so can only lead to the end of road and nothing else. However, the golden era of the RCom will always remain etched into the hearts of the people.