RCom, Ericsson agree on settlement; green signal for Reliance Jio deal

The NCLAT asked the Anil Ambani-controlled firm to pay Ericsson Rs 5.5 billion by the end of September

The National Company Law Appellate Tribunal (NCLAT) stayed the May 15 order of the National Company Law Tribunal (NCLT) in Mumbai, which had admitted Reliance Communications (RCom) and two of its subsidiaries for insolvency proceedings.

The NCLAT asked the Anil Ambani-controlled firm to pay Ericsson Rs 5.5 billion by the end of September.

With the stay on bankruptcy proceedings, RCom can now continue with its asset monetisation scheme involving the sale of towers, optic fibre cable network, spectrum and media convergence nodes to brother Mukesh Ambani-controlled Reliance JioInfocomm (Jio) for Rs 170 billion.

On Tuesday, NCLAT chairman Justice S J Mukhopadhaya asked the parties to settle the matter stating that the fate of operational creditors under the corporate resolution process was not ideal, especially if Ericsson wished to recover the majority of its dues.

NCLAT also asked RCom and Ericsson to file an affidavit by June 7 stating that the two companies will abide by the settlement.

Ericsson India, a subsidiary of the Swedish telecom equipment maker and service provider, had filed a case at NCLT, Mumbai last September seeking the liquidation of Reliance Communications (RCom), and its subsidiaries Reliance Infratel and Reliance Telecom, in order to recover Rs 11.5 billion.

The three companies were subsequently admitted under the Insolvency and Bankruptcy Code (IBC), and NCLT appointed a resolution professional (RP) to take over the management of each company. Ericsson had argued that it had entered into a seven-year agreement in 2014 with RCom and its subsidiaries for maintaining, upgrading and developing the latter's telecommunications infrastructure, which was not honoured.

RCom and its subsidiaries owed Ericsson around Rs 9.78 billion for their services which, Ericsson's counsel told the NCLT, had increased to around Rs 16 billion given that there were delays in the payment, despite several notices being issued to the Anil Ambani controlled companies.

RCom filed its appeal with the NCLAT, and was awarded with a stay on the order admitting the three firms under the IBC.

RCom and its subsidiaries now have the permission to go ahead with the debt restructuring plan that was prepared in December 2017. There were fears of the three Reliance group companies undergoing insolvency proceedings, which would have meant that the asset monetisation scheme under the plan would not be allowed.

BSNL offers: Recharge with Rs 98, get 1.5GB data per day: What to must know

BSNL has decided to take on Reliance Jio, Airtel with 'Data Tsunami' offer. Here's what BSNL customers must know

Taking on Reliance Jio, Bharat Sanchar Nigam Limited (BSNL) has launched 'Data Tsunami' offer, under which users will get 1.5GB data per day for a period of 26 days with a charge of Rs 98. The state operator has also upped the FUP limit for its Rs 4,999 FTTH plan to stay put in the fibre connectivity competition. "BSNL provides efficient services at cheaper rates as per requirement of customers. This is a pure data STV which provides at a very economic rate at Rs 2.51 per GB," said RK Mittal, Director (CM), BSNL Board, in a press statement.

BSNL Offers :All you need to know about BSNL's 'Data Tsunami' offer

BSNL 1.5GB data per day pack

The new offer comes through the new data STV-98 pack that is available with immediate effect across all BSNL circles in India. Users will get 1.5GB data per day for a period of 26 days with a charge of Rs 98. With the fresh benefits that are available through the Rs 98 pack, BSNL is offering data at Rs 2.51 per GB. This is lower than what Jio is offering with its Rs 149 pack that has a validity of 28 days and offers 1.5GB data per day - which eventually costs Rs 3.5 per GB. Airtel also has a similar Rs 149 pack that brings the data benefits close to Rs 5.3 per GB. However, both Jio and Airtel are providing unlimited voice calls and 100 SMS messages per day that you won't get on the Rs. 98 BSNL pack. This Rs 98 pack offers only data, unlike the Rs 118 pack.

BSNL Rs 118 pack for unlimited voice calling and 1GB of data

Few days back, the telcos launched its Rs 118 pack that offered unlimited voice calling and 1GB of data with a validity of 28 days.

It is to be noted BSNL offers 3G speeds in all circles except Kerala while Jio and Airtel offer 4G speed across all the circles.

Here's a list of Jio's prepaid recharge plans that offer 1.5GB daily data:

Jio prepaid recharge plan priced at Rs 198

Jio's Rs 198 prepaid recharge plan offers 42 GB of 4G data for a period of 28 days, with a daily cap of 1.5GB data. Unlimited local, STD, roaming voice call benefits are also available with this prepaid recharge plan. Subscribers get access to host of Jio apps and benefits of free 100 SMSes per day. The validity of this prepaid plan is 28 days.

Jio prepaid recharge plan priced at Rs 398

Jio's Rs 398 prepaid recharge plan offers 105 GB of 4G data for a period of 70 days, with a daily cap of 1.5 GB data. Unlimited local, STD, roaming voice call benefits are also available with this prepaid recharge plan. Subscribers get access to host of Jio apps and benefits of free 100 SMSes per day. The validity of this prepaid plan is 28 days.s.

Reliance to invest Rs 600 bn in Jio this year, may borrow Rs 1 trn more

Subscriber additions, while suppressing incumbent telecom operators, will continue to remain top priority, say analysts

Mukesh Ambani-led Reliance Industries Ltd (RIL) is likely to invest another Rs 600 billion this year in its telecom business Reliance Jio Infocomm with an emphasis on faster rollout of broadband services and wireless expansion, Livemint reported, quoting anonymous company sources.

The sources have also been quoted as saying that Reliance Jio might borrow up to Rs 1 trillion in addition to the above-mentioned investment. Jio and RIL spokespersons did not comment on queries about the investment.

“Management made it very clear that their focus in the near term is to retain and grow their subscriber base and they would respond to market pricing. Essentially the implication was that incumbents would need to raise tariffs, but this would effectively lead to loss of market share for incumbents as JIO would offer the best 'value' to subscribers and hence continue to see large subscriber additions,” noted JP Morgan in their recent report on RIL.

The report further stated that JIO is expected to launch its broadband business with a pricing strategy similar to that of its telecom arm, given its focus is on creating a new market.

While JIO’s average revenue per user (ARPU) fell to Rs 137 from Rs 154 in the last quarter of 2017-18, it still remains better than that of Airtel and Idea cellular. JIO also managed to add almost 9 million subscribers during the quarter.

“Jio is expected to remain aggressive to gain market share, which could keep industry revenue under pressure and return ratios of incumbents suppressed,” noted an India Equity Research in a report on Monday.

JioFiber, the wired broadband arm, has started offering what they claim to be 'ultra-high-speed' fibre to home (FTTH) broadband connections with 1.1 terabytes (TB) of free data at speeds of 100 megabits per second (mbps) in select markets in the country already. However, commercial services are likely to be rolled out in the second-half of the year.

The company currently claims more than 300,000 km of optical fibre network in the country and the company is expected to target over 100 million households across the country with the service.

Reliance Jio Prime membership subscription to end on March 31: What next?

Jio Prime subscriptions, started April 1 last year, expire on 31 March. Now, with the expiry approaching, it is expected that Jio would make a new announcement sometime soon

Reliance Jio shook the Indian telecommunication space with the launch of its affordable, data-centric network. After doling out freebies for more than the first six months since the launch, the Mukesh Ambani-owned telecom major introduced Prime membership at Rs 99 with the promise of offering subsidised recharge options and additional benefits for a period of one year.

The Jio Prime memberships, which came into effect on April 1 last year, are valid until 31 March. Now, with the subscription expiry approaching, it is expected that Jio would make an announcement sometime soon.

While there is nothing official yet, it is expected that the company might completely do away with the Prime subscription or offer it as a free service.

Here is what the company offered in the first iteration of the Prime membership:

• Free unlimited data and voice services for one year at an effective price of Rs 10 per day
• Special recharge plans with additional data and validity
• Free VoLTE-based voice calls to any network, even on roaming with no black out days either.
• Free access to Jio app suite

The Prime membership was initially rolled out as a loyalty programme to retain subscribers as the company moved from free to paid services.In the first leg, the Prime membership was advertised as a limited period offer. However, as time moved, the company continued offering the membership to get more subscribers. Now, according to Jio’s official portal, there is no mention of services that the company offers to non-prime subscribers. Therefore, it is safe to assume that the subscription based membership program may eventually fade out.

RCom: Will the monetisation plan work?

RCom has also talked about monetising its real estate but that is easier said than done

Anil-Ambani led Reliance Communications' offer to lenders to take control of the company by converting Rs 7,100 crore of its debt into a 51 per cent equity stake is perhaps the telecom major's best bet. If the latest rescue attempt goes through, lenders led by SBI will hold at least 51 per cent in the telco and promoters stake will be halved to around 26 per cent.

RCom has said it will get about Rs 17,000 crore by monetising its assets. The plan includes selling its tower business, fibre network, and media convergence nodes and it will estimates another Rs 10,000 crore through real estate sales in eight cities. Post debt monetisation, the company said it would have only Rs 6,000 crore of debt left. Moreover, another Rs 4,000 crore taken from unsecured creditors like Ericsson needs to be negotiated with.

So how prudent is this monetisation plan?*

Under its earlier plan, RCom had said it would cut its debt by half by December through a merger with Aircel and sale of majority stake in its tower business to Canada-based investment firm Brookfield Infrastructure for Rs 11,000 crore, valuing the business at Rs 20,000 crore. However, now that the Aircel deal is off and RCom shutting down its 2G business, which constitutes for a bulk of its subscribers, the deal valuation is likely to be revised downwards. In essence, the telecom tower deal is subject to a new valuation given that Aircel’s tenancies will not be included in the deal anymore. Moreover, RCom now runs the risk of losing at least half of its 2G subscribers.

Also Read : New Year disruption plan: Now, Reliance Jio moves to broadband, TV space

Analysts say that even if RCom sells the entire 100 per cent stake in its 43,600 tower assets to Brookfield it will not fetch them more than Rs 8,000 crore.

RCom is hoping that it will be able to rake in Rs 14,000 crore from its spectrum sale though the value of the spectrum is Rs 26,000 crore, which includes spectrum it got from the merger of MTS. However, analysts are of the view that there is already a huge oversupply of spectrum, and that the paper price might not be reflected in reality. RCom may also not find many takers for its spectrum given how things went down with Telenor and TTSL which gave their spectrum virtually free to Bharti Airtel. (more)

Rs 2500 JioPhone @ just Rs 1500! How RIL is planning to recover losses

Jio has amassed more than 128 million subscribers since its launch last year

Reliance Industries' telecom upstart Jio is footing at least 40 percent of the cost of its basic 4G phone, two sources familiar with the matter said, as it bets on recovering the investment by luring in millions of new customers.

The Jio Phone, rolling out this week for a refundable deposit of 1,500 rupees ($23.05), will cost at least 2,500 rupees ($39) to assemble, the sources told Reuters.

That means Jio will likely carry more than $150 million in costs for every 10 million JioPhones it sells.

And the company aims to build a subscriber base of between 250 million and 300 million users in the next two years, said one of the sources.

Reliance Industries did not respond to a request for comment.

Some Reliance investors may flinch at the cost of subsidies, but the scale of the outlay is a clear signal of the level of Jio's ambition, as it targets an audience of some 500 million who still cannot afford smartphones in India.

Also Read : Nokia 8 with dual rear camera launched in India at Rs 36,999

Jio's advanced voice over LTE (VoLTE) network only works with 4G enabled devices, inaccessible to many even at subsidised rates. The significantly cheaper JioPhone, however, will open the Internet to a less affluent segment of Indians for the very first time.

"The 3,000-rupee smartphone was not cutting it," the second source said. "Reliance is making a bold attempt with this phone and data will be the key driver for them."

Analysts estimate a majority of Indian feature phone users have an average revenue per user (ARPU) of rupees 50 or lower. JioPhone's 153 rupees monthly plan for so-called pre-paid users aims to drive up this ARPU, the first source said.

Jio, backed by India's richest man Mukesh Ambani, has amassed more than 128 million subscribers since its launch last year, by offering free voice and cut-price data for months.(more)

Airtel unveils fresh packs to counter Jio heat

Days after Reliance Jio extended its free services, mobile operator Bharti Airtel today came out with two prepaid offerings, including a Rs 145 pack, that will offer free unlimited local/STD calls along with 4G data.

While Airtel's Rs 145 pack offers 300 MB 4G data along with free unlimited Airtel-to-Airtel local/STD calls, its Rs 345 pack offers unlimited free local/STD calls to any network in India and 1GB 4G data.

Both packs have a validity of 28 days and are available for customers across the country.

Mukesh Ambani's Reliance Jio -- which garnered 52 million customer base in the first three months of 4G launch -- recently announced extension of free domestic voice calls and data till March 31, 2017. Even after March, the company would offer free calls for life to its 4G customers.

Industry watchers are of the view that extension of free services by Reliance Jio will add to the woes of the industry which is already reeling under Rs 4,25,000-crore debt.

Ajai Puri, Director - Market Operations (India and South Asia), Bharti Airtel said, "This is another initiative from us to bring innovative bundle offers to our customers in line with our endeavour to provide the great value backed by a superior network experience."

Besides free calls on same network, the Rs 145 pack offers 300 MB data to customers who have 4G-enabled mobile phone, and 50 MB data to customers with handsets suited for web surfing and accessing light social media applications. Read more.