Telecom a money guzzler, even Tatas had to gift it away:Ambani

Mumbai, Dec 26 (PTI) Months after voicing fears of anemerging monopoly in the sector and a forceful shutdown ofReliance Communications' consumer business, Anil Ambani todaysaid telecom has become a money guzzler where only those withdeep pockets can survive.Even the "mighty" house of Tatas had to "gift away"their telecom business (to Airtel), Ambani asserted, soundingbitter about the regulatory framework, saying the long timetaken to clear RCom's merger with Systema Shyam Telecomrepresents the "unease of doing business"."This is a crisis of the wireless telecom sector andit has engulfed many, many people and many, many companies. Ifit is the mighty house of the Tatas who had to gift theirbusiness, then very little has to be said about othercorporate groups. The writing was on the wall," the embattledRCom chairman told reporters here announcing yet anotherrevival plan for his nearly crippled telecom business.It can be noted that the entry of his elder brotherMukesh's Reliance Jio which made the largest revenue earnervoice calls free and priced data aggressively, has wrecked thefinancials of every company and resulted in a massiveconsolidation in the sector with Vodafone and Idea announcinga merger in March to stay floating."It's a clear signal that this is something which isnot for 10 players to enjoy. This is more for 2-3-4 players toenjoy and those who have either unlimited money or those whohave the ability to raise unlimited amount of money," Ambanisaid, without naming any company."You really need a pipeline into the RBI's printingpress if you want to be in the wireless business because it isa guzzler of currency, every minute, every hour and everysingle day," he added.After the failure of its debt-reducing plans likesale of the tower unit and a merger with its immediate rivalAircel, RCom was forced to exit the flagship consumer facingbusiness in this November and also charted a future coursewhich will limit its offerings to the enterprise segmentgoing forward.Ambani, who entered the telecom business in 2002 afterinheriting it as part of a truce to the bitter family feudfollowing the death of his father, said the telecom businessdepends on continuous investments due to changing technologiesand also the necessity to take services to newer pockets alongwith infrastructure development."You are on a perpetual treadmill. Capex never everstops, it is every day. You got to be really geared in termsof your balance sheet, in your cash flow, in financialstructure to do that," he said.The comments come months after Ambani had told hisshareholders that the sector was in ICCU and warned of amonopoly in the sector.It can be noted that RJio is tipped to be one of the frontrunners in the distress sale of spectrum which RCom will be undertaking to avoid the consortium of 35 lenders from taking over the company as part of debt reduction.

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