Archive for October, 2013

RIL Responds to Online Petition Regarding its Chicken Business

October 28, 2013

Mukesh Ambani owned Reliance Industries Limited (RIL) has come out to deny claims that it has tied with a foreign partner for its chicken restaurant business. Reliance Industries Limited in a statement on Monday, October 28, 2013 said, ‘We wish to put on record that the story is factually incorrect and that we have not tied up with a foreign partner for chicken restaurant business. We also confirm that we are neither planning nor desirous of pursuing setting up of plants to process chicken as articulated in the media story.’

The news that Mukesh Ambani, a strict vegetarian setting up a chicken restaurant chain as well as selling chicken products through Reliance Retail, a subsidiary of Reliance Industries Limited spread like wildlife during the past week. The fact that Reliance Retail considered venturing into the QSR segment was not a surprising one; the sector is expected to grow at 30% YoY and would represent a very healthy revenue stream and could generate huge profits.The local QSR market is dominated by globally present brands. This market, at 63%, or 3,400 crore, projected to grow by 30% due to growth in Tier 2 and Tier 3 cities. CRISIL estimates annual spending on restaurants in these cities to grow by up to 150% to Rs 3,750 crores per home. However, that Mukesh Ambani, a strict vegetarian setting up a chicken restaurant chain as well as selling chicken products did raise some eyebrows.

An online petition asking Mr. Ambani to reconsider his decision on ethical and moral grounds was seen soon after this story did the rounds. The petition claimed animals will suffer by means of ‘Cruelty & Abuse.’ Refuting the allegations made in the petition, a RIL statement said, ‘The story should not generate any misconceptions in the minds of our stakeholders and well-wishers. We therefore request everyone to ignore the story and its unsubstantiated information.’

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Reliance Retail to Enter E-Commerce Segment

October 22, 2013

After a host of businesses started their own e-commerce portals, Mukesh Ambani owned Reliance Retail finally pulls the trigger and joins the Indian e-commerce bandwagon.

A technical team commissioned by Mukesh Ambani has commenced work on the project. Reliance Retail may look to adapt a marketplace model made famous by the likes of eBay and Amazon.New entries into the e-commerce space are still discovering what model to adopt based on their needs. A source close to Reliance Retail said that the chain is evaluating all possibilities. The company is looking at multi-channels to retail, which has been made clear in presentation to analysts during the latest quarterly results.

Reliance Retail runs over 1500 stores across the country in sectors as diverse as jewellery, electronic goods, and apparel apart from the supermarket type stores. The company posted sales of nearly Rs 3,500 Crores in the third quarter of 2013. This represents a jump of 31% from a year ago. The company’s EBITDA stood at 165 crore in the first half of FY 2014. The MukeshAmbani behemoth, Reliance Industries, also runs a closed b2b e-commerce portal for businesses wanting to purchase Polyester and other products produced by the group.

The Indian e-commerce market continues to grow at a fast pace. It was worth $2.5 billion in 2009 and increased by over 450% to $14 billion in 2012. Of this, online retailing comprises a comparatively small percentage of about 12.5%. However, it’s safe to assume that this figure will grow exponentially over the coming years. India’s online shoppers are growing too. The online shopping community shows a staggering CAGR (Compounded Annual Growth rate) of 30% compared to the global rate of 8-10%.

There are 75-100 Indian players in the highly lucrative e-commerce segment here. Most of them are start-ups founded by ambitious youth. The majority of these companies have received the backing of top dollar venture capitalists and private equity firms. Along with these local start-ups, global giants like eBay and Amazon are a part of the growing industry too. While Amazon entered the Indian online marketplace segment just last JuneeBay entered India almost a decade ago with its buyout of bazee.com.

Compared with organised retail, which is restricted to metros and big cities and has a penetration of only 7-10%, the opportunity offered by e-commerce is huge as it allows companies to ship most products anywhere in the country. The country’s Internet user base is expected to almost treble to 300 million in about two years and this would result in new users and further growth for companies in the e-commerce segment.

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RIL Jio gets Singapore Telecom License

October 17, 2013

Reliance Industries Limited’s (RIL) telecom arm, Reliance JioInfocomm (RJIL) Limited has been awarded licence to facilitate internet and voice roaming services in Singapore.

“RJIL has been awarded with a Facility Based Operator License in Singapore,” Reliance JioInfocomm Limited said in a statement.The license allows Reliance JioInfocomm Pvt. Ltd., to buy, operate and sell undersea and/or terrestrial fibre connectivity, set up its internet point of presence, offer internet transit and peering services as well as data and voice roaming services in Singapore.

Reliance JioInfocomm has been building high capacity to support telecom services on its overseas network.MukeshAmbani led RJIL also signed an agreement with competitor BhartiAirtel, which will provide data capacity on its i2i submarine cable between India and Singapore.

RJIL is only company to have pan-India 4G spectrum. The company said it has received a Letter of Intent from the Department of Telecom for award of the new telecom permit, the Unified Licence, and it has complied with requirements, including payment of the entry fee.

RJIL was asked to submit a one-time entry fee of about Rs 1,673 crore, a performance bank guarantee of Rs 220 crore and a financial bank guarantee of Rs 44 crore for the license.

In addition to fixed and wireless broadband services, RJIL plans to provide end-to-end connectivity solutions in domains such as education, healthcare, security, financial services, government-citizen interfaces and entertainment.

Reliance JioInfocomm, along with several international carriers is a part of the consortium for the establishment of the Bay of Bengal Gateway (BBG) submarine cable system. The other members include Telekom Malaysia Berhad (TM) (Malaysia), Vodafone Group (UK), Omantel (Oman), Etisalat (UAE), Alcatel-Lucent and Dialog Axiata (Sri Lanka). This became official withthe signing of the Construction and Maintenance Agreement (C&MA) and the Supply Contract for BBG in Kuala Lumpur.

The BBG cable system is designed to provide upgradable and transmission facilities by adopting the state-of-the-art 100Gbps technology. This cable system is expected to carry commercial traffic by end of 2014. The undersea or submarine cable system will link South East Asia, South Asia and the Middle East as well as Europe, Africa and Far East Asia.

RJIL has grown at a phenomenal rate over the last year- From getting a pan-India 4G license to implementing 4G services in the eastern part of India.The company said its headcount increased almost six-fold to over 4,000 employees currently across the nation from less than 700 employees last year.

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Reliance Jio looks at Odisha for 4G Services Rollout

October 8, 2013

Mukesh Ambani owned Reliance JioInfocomm has started discussions with the OdishaGovernment on launch of the 4G ultra-broadband wireless internet services in the State. The State Housing and Urban Development department has asked RIL to submit a concrete proposal on development of infrastructure for the purpose.

Reliance JioInfocomm, a subsidiary of MukeshAmbani-controlled RIL, has got the licences for nationwide launch of 4G services across 22 circles, including Odisha. The fourth generation broadband services will enable high speed data transfer and access to the tune of over 100 mbps while 3G speeds are limited to around 21 mbps at the fastest. The speed of data access can facilitate uninterrupted real-time audio-video streaming and sharing along with smooth video calling, chats and conferences. It is being hailed as a game-changer by facilitating everything that 3G could not.

The telecom company has entered into a partnership with Anil Ambani’s Reliance Communications for sharing the latter’s Base Transceiver Station (BTS) sites as well as the optical fibre cable (OFC) network for rollout of 4G. The company has earmarked a total sum of around INR 7000 crore to invest in the eastern region comprising West Bengal, Orissa, Bihar, Jharkhand, Assam and the North-East for 4G roll-out. Reliance Communications has about 510 3G BTS sites and 25,000 km-long OFC network in Odisha. While sharing the infrastructure, RIL will have to set up its own infrastructure like 4G towers to give shape to the services, sources said.

The decision to launch this ultra-high speed 4G service in Odisha comes on the background of 3G (third generation telecom) services struggling to establish a firm foothold in Odisha despite being launched more than two years ago. 3G services are available in only around 20 towns and cities as of now and are administered bythree players BSNL, Reliance and Aircel. The customer base is measly, at around 4 lakh, while total mobile subscribers in the State have crossed 2.40 crores.

According to sources, the main hurdle for 3G in Odisha has been lack of coverage coupled with high tariffs. Despite proclaiming high speed connectivity and data transfers, actual user experience has not been up to the mark.The service providers, though, have begun to slash prices to drive adoption among consumers.

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