There must be a story behind Anil Ambani’s decision to bankrupt Rcom ‘s future?
How Jio came into the picture?
The two brothers began their entire story in 2002 after their father died. Without a will, Dhirubhai Ambani died of a big stroke. His story was truly a remarkable one, starting from a simple clerk to founding the biggest empire of India.

Between Anil Ambani and Mukesh Ambani, there were major problems regarding the ownership of the Reliance Industries. Each one of them wanted to run the company in a different way.

As their disputes were growing, their mother Kokilaben Ambani divided the company into two parts.

Anil got the new industries which included telecom, entertainment, power, and financial services. While Mukesh got evergreen industries like petrochemicals and oil refineries.

Anil got telecom sector which under the leadership of Mukesh has grown to a whole different level.

During the early days of Rcom Mukesh Ambani offered free mobile phones and also introduced cheaper call rates. Because of this, other competitors to stay in the market also reduced their rates.

During the division of the empire. Mukesh had to sign a non-compete clause agreement.

In 2010, the agreement got expired and Mukesh bought the 96% share of Infotel Broadband.

During that time there was no proper 3G connection in India. But yet Infotel Broadband was successfully able to build many 4G towers all over the country. Later, this company’s name was changed to people’s favorite Jio.

Starting a telecom company was not because of the rivalry from his brother. Mukesh had a lot of experience when it came to this industry.

By offering an unlimited amount of calls and data. Jio made their pathway in between the big telecom giants. By their free schemes, they made people subconsciously prepared for using more data at higher speeds.

Game Changer
Reliance’s strategy to diversify beyond the energy sector was the biggest game changer.

Mukesh Ambani ‘s vision for 10 years predicted that he was going to invest heavily in the next gold data.

Dhirubhai ‘s old petrochemicals and oil business were what financed this investment in Reliance Jio. These industries attracted various investors to invest capital into the upcoming telecom revolution.

Whereas, the younger brother was selling his assets to clear off his company’s debts.

As Anil’s companies were new, the investors didn’t have much interest to invest in them. This brought Anil to sell his assets.

The old industries were a boon to Mukesh. Which changed the whole game between the brothers. It was Mukesh’s vision and belief that made Jio from nothing to the biggest telecom company in India.

The Great Fall
Already Anil was selling his assets to clear his debts and then he faced a major downfall in the form of Reliance Naval & Engineering Ltd. It had a great fall of 76% of the shares.

Reliance Infrastructure Ltd, which built Mumbai’s first metro line missed a bond payment which made them sell their power transmission assets.

The power hub, Reliance Power Ltd, saw a great downfall of share prices.

The most profitable in the entire Anil’s empire Reliance Capital Ltd has also seen a great decline in its shares.

But the biggest blow came in the form of Jio. Rcom sold its fiber-optic network of 178,000 km for 30 billion rupees to his big brother Mukesh.

The Bankruptcy
From one of the biggest corporations 15 years back to nothing, Rcom became the story that proved how big business fall at a blink of an eye.

Anil Ambani recently declared that they will be filing bankruptcy in the NCLT (National Company Law Tribunal).

In recent years, RCom has been slowly dying. With the growth of Jio and the other competitors, RCom failed to show their place in the growing market.

When everyone in the industry changed themselves to GSM (Global System for Mobile) RCom stood at CDMA (Code-Division Multiple Access). When RCom finally decided to shift towards GSM it was too late.

In the past few years, RCom has shown that it’s going to surely break into the world full of telecom competition. Where everyone was fighting for better speeds and networks at a lower price.

The reasons for the downfall were the profile of its customers, average spending, the quality of RCom’s network, the increasing debt, the hyper-competitive market, and inability to sell off the non-telecom assets seem to have weighed down heavily on RCom.

 

Dear Anil,

If by chance you are reading this article and want to sue me for money – then tough luck because I don’t have any.

But you can sue Bloomberg that brought out the article: India’s Richest Brothers and How They Grew $41 Billion Apart

I know the title of this article is catchy. But the story of both the brothers is too. No one is great in this world. This article is not against anyone. This story inspired me a lot and I hoped to share among you guys too. Don’t form any opinions on someone after reading this.