Reliance Group Chairman Anil Ambani on Tuesday termed falling wireless telephony rates as “creative destruction” and not a “disruptive factor”, as it is being made out to be. Speaking at the group's annual general meetings, Jai Anmol Ambani, executive director of Reliance Capital, said its health insurance arm, which has got first-level approval from the insurance regulator — the Insurance Regulatory and Development Authority of India (Irdai) — is set to be operational from early next year.
Anil Ambani was critical of the lack of competition in the telecom sector. “The sector needs Rs 1 lakh crore to expand and maintain quality of service. Where will the money come from? Do we want oligopoly, duopoly or monopoly in the sector?” Anil asked, while addressing R-Com’s shareholders. Ever since his sibling Mukesh Ambani’s Jio’s wireless telephony launched with free voice calls, the telecom sector is witnessing falling margins, thus, killing smaller players. Players said after Jio, only Bharti Airtel, and Idea-Vodafone would survive due to their deep pockets.
Ambani said the sector’s Rs 9-lakh-crore debt was in jeopardy. After the Reserve Bank of India asked lenders to tread with caution, few banks were extending loans to telcos, he said.
“As far as R-Com is concerned, we have a transformation programme in place. We have received full support of our lenders. To re-iterate, only wireless business is in trouble, other businesses are robust and growing well.”
R-Com had announced ambitious plans of merger with Aircel earlier this year and to sell its telecom tower business to help repay its debts worth Rs 45,000 crore. However, Ericsson’s bankruptcy petition for recovery of Rs 1,555 crore has delayed those plans.
R-Com’s stock closed 1.25 per cent down at Rs 19.7 on Tuesday.
“To create retail focus we are setting up a stand-alone health insurance company,” Jai Anmol Ambani, Anil Ambani’s son, said. At present, health insurance products are being sold by non-life insurer Reliance General Insurance. The move to have a stand-alone health insurance company is to increase retail presence in the already-cluttered mediclaim segment.
On Reliance Home Finance, which was listed last week, the firm said the focus would be on affordable housing. Moreover, they said the public issue of Reliance General Insurance was on course, having received Irdai approval and the listing would take place in the current financial year itself.
At Reliance Infrastructure's meeting, Ambani said Reliance Naval & Engineering plans to bid for six submarine contracts valued at Rs 40,000 crore. Reliance Naval also plans to raise funds selling right shares.
The company, previously known as Reliance Defence, recently changed its name to emphasise its focus on naval shipbuilding. The company had unveiled two naval offshore patrol vessels in July.
At the annual general meeting of Reliance Power, Ambani said India has more than Rs 2.5 lakh crore of stressed power assets. “Fortunately, it’s a buyer’s market,” Ambani said, adding that the company would participate in commercial coal mining.