About 1,000 to 1,200 Reliance Communications' workers will lose their jobs by November 30 as the Anil Ambani-led company is likely to close major parts of its wireless business due to losses and robust competition by Reliance Jio's free voice calls and ultra cheap data services.
The company has already communicated to its employees that their last working day will be November 30, according to an Economic Times report.
"We tried whatever means to sustain the business but we will not be able to do it beyond 30 days from now... All of us need to move on, from a HR process perspective; all of us need to put in our resignations which is obvious," Gurdeep Singh, executive director of Reliance Telecom, told employees on Tuesday, according to an audio clip available with the Economic Times.
However, besides consumer voice calls and 4G dongle post-paid everything else will shut down. According to Singh, the company will also not renew its Direct-to-Home Television (DTH) licence which expires on November 21.
However, its tower businesses will continue as it is bringing in business despite sturdy competition from Jio and other telecom players. But it is also in talks to sell its stake in its tower unit to Canada-based asset management company Brookfield.
Sources close to the matter told Economic Times that the company will likely shut down its 2G business and eventually its 3G facility too to shift its focus to more profitable operations – like the 4G service. This will lead to nearly 40 million 2G subscribers of RCom's total 75 million users shifting to a new operator. Most of the RCom's users are on 3G now.
Jio stunts
Mukesh Ambani's Reliance Jio Infocomm Ltd entrance last September has disrupted the telecom industry by offering a lifetime free voice calls and ultra cheap free mobile data.
Jio, through heavy discounting, has managed to grab 10 percent of the country's telecom subscriber base in less than a year. Its rivals are changing their business strategies often to defend their market share.
As if the telecom price wars were not enough, Jio also introduced smartphones at zero cost and said that voice calls will remain free on the phone.
Experts suggest that this device will be a game changer in the India's mobile industry.
To add to the woes of other competitors, the phone also has many features like the ability to pay bills, it can be connected with a TV using a cable, allowing users to watch content on apps, with content provided by the company —Jio TV and JioCinema.
The Indian telecom industry is at present split over interconnect usage charges—the fee payable for calls originating from one mobile network and ending in another. Reliance Jio demanded for the charges to be scrapped off which is good news for the users, however, other private telecom players especially Bharti Airtel wants them to be doubled.
