Reliance Infocomm hit by billing glitches

Mukesh Ambani, chairman and managing director of Reliance Industries, has admitted that Reliance Infocomm faced logistics, billing and collection problems. However, it has "met this challenge with fortitude and confidence".

In his statement to shareholders at the RIL's 30th annual general meeting here today, Ambani pointed out that problems were owing to unprecedented response for its Monsoon Hungama scheme. Within 10 days of the launch of this scheme, the company received applications from over a million subscribers.

Ambani pointed out that Reliance Infocomm has created a world record by posting an operating cash profit in its first year of operation. However, it had to respond to the situation and resort to a conservative measure of providing for bad debts amounting to Rs 436 crore.

The cash profit, after provision of bad debt was Rs 160 crore, depreciation and amortisation was Rs 550 crore which resulted in a net loss o Rs 390 crore.

Ambani said "as in the past, very soon the Reliance Infocomm team would have put these problems behind an the customer will see a discernible difference'.

Answering a shareholder's query, Ambani categorically pointed out, "let us give Reliance Infocomm three-year timeframe. We will be proud of it".

Commenting on the services of the company, Ambani said the company was expanding its services from about 1,100 towns to about 5,000 towns in a phases, "in order to reach unserved markets".

After the second phase of expansion, Reliance Infocomm services will be available to over 100,000 villages and will have a capacity to cater to 40 million mobile subscribers.