Anil Ambani says telecom sector in ICCU, warns of monopoly

September 26, 2017 22:53

Anil Ambani today said the telecom sector is in an "ICCU" with government and lenders most at risk, and warned of a monopolistic market emerging.

He also promised to get RCom out of its difficulties by March 2018, saying its lenders are supportive of all its actions.

With the entry of his elder brother Mukesh Ambani- promoted Reliance Jio wrecking the already competitive market, Anil Ambani said we are "potentially" moving towards a market with limited competition and feared that it may turn into a "monopoly".

"The wireless or mobility sector, from any dimension you look at, is in the ICCU. It is not in the general ward, it is not in the ICU, it is in the ICCU," Ambani said at Reliance Communications' (Rcom) annual general meeting in Mumbai.

"It is a systemic threat for government, for its revenues, it's a systemic threat for our banking sector and it is what I call creative destruction of a sector," he said.

Noting that over the years as the number of operators coming to six from over over a dozen, there was a sharp erosion in competitive landscape where nearly all global companies who were here have exited.

"I am sure they see things that allow them to write-off large amounts of money and exit India. It cannot be the power of the market that is forcing them to leave but it has got to be from other dimensions of the sector which is forcing them to leave," he said.

Ambani said fresh lending to the sector has completely halted after Reserve Bank's caution to banks in April," and wondered how can the once-sunshine sector maintain service quality as it requires Rs 1 trillion in investments annually.

Warning that the industry is heading towards a monopolistic situation, he said "If customer is supreme and consumer is king, can we afford to be a oligopoly, a duapoly or a monopoly?"

Ambani claimed that Rcom, which has a debt of Rs 45,000 crore and has been given a moratorium till this December, has the support of all its lenders including the Chinese ones and promised to get the company back.

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