The Anil Ambani promoted India’s No. 3 Mobile Operator Reliance Communications has seen a significant erosion of close to 33% of its revenue market share over the last 10 quarters. In April 2010, RCOM’s then CEO Syed Safawi in an interview to Economic Times had stated that the company had an Industry revenue share of 12% which it was planning to increase to 20% over 1000 days. Another report in Economic Times in end-November 2012 (close to 1000 days) stated RCOM’s Industry revenue share at 8%.
By that premise, RCOM has significantly under performed on its own-targeted Industry revenue share of 20%. The underperformance of Anil Ambani Group managed RCOM is so dismal that instead of holding its Industry revenue share of 12% in April 2010, it has infact lost its Industry revenue ranking by 33%, to a single digit level of 8%.
However, in the quarter ending September 2012, RCOM infact gained Industry revenue share from a 7.67% in the previous quarter to 8%. Interestingly, Syed Safawi had also stated the targets of adding 100 mn subscribers over 1000 days in April 2010, out of which the company has merely added 18.5 mn primarily owning to churning out 3.6 crore inactive subscribers from its network.
While the revenue share slid from April 2010 to February 2012, Punit Garg, President of RCOM who was the interim head of the wireless business during the transition from Syed Safawi to Gurdip Singh in an interview to CNBC claimed: We have a demonstrated stability in our revenues and operations over consecutive eight-nine quarters. We should finish fourth quarter with a bang. It will be better than previous three quarters. So we are working hard to change the market perception.
Telecom Industry veteran Gurdip Singh who joined RCOM as CEO in May-June 2012 did show the promise by a marginal increase in the now No. 3 telco’s Industry revenue share. To be fair to Gurdip Singh, a marginal increase in the first quarter at the helm of beleaguered RCOM, which saw a sustained slide over past quarters, is no small feat. If viewed as early indicators, it would not be reasonable to judge Gurdip Singh’s performance and the attempted turnaround of No. 3 Operator before end of June 2013.
However, the telecom operator which was once seen as the only challenge to Bharti Airtel, more a battle of supremacy between Anil Ambani and Sunil Mittal, will now have to go all out to save its No. 3 slot from the sustained growth of Kumar Birla’s Idea Cellular which is closing in fast. While Anil Ambani lost badly to Sunil Mittal, the next few months will decide whether Gurdip Singh has the mettle to save Anil Ambani’s RCOM from Kumar Birla’s Idea challenge.