Mukesh Ambani: Asia’s richest man in $13bn ruling boost

January 17, 2020 by No Comments


Managing Director of Reliance Industries, Mukesh Ambani.Image copyright
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Asia’s richest man has scored two major wins in his ambition to dominate the Indian telecoms market.

The main competitors to Mukesh Ambani’s Reliance Jio have been told they must pay the bulk of almost $13bn (£10bn) to the government in historical fees.

The country’s top court rejected calls from older firms, including Vodafone Idea, to review the case.

Meanwhile, Reliance Jio has overtaken Vodafone Idea to become India’s biggest mobile services operator.

The court ruling adds yet more financial pressure on India’s telecoms sector, which has already been hit hard by a bitter price war.

After three years of price cutting, led by Mr Ambani, his company now has only two major competitors – Bharti Airtel and Vodafone Idea.

Vodafone Idea has been told it must pay about $3.9bn, while the ruling means Bharti Airtel is liable for $3bn. The charges relate to licence and spectrum fees that have accumulated over many years.

Reliance Jio, which is less than four years old, owes just $2m.

Vodafone has previously said the situation was “critical”, while Bharti Airtel said an earlier court order cast doubt on “its ability to continue as a going concern”.

Telecoms analyst Minakshi Ghosh believes the Supreme Court ruling threatens the future of Vodafone Idea, a joint venture of Britain’s Vodafone and local operator Idea Cellular.

She told the BBC: “Airtel, I think, would be under pressure, but would be able to manage. The cause of concern will be Vodafone (Idea).

“Probably Vodafone will be the most affected and we will end up with a duopoly of Airtel and Jio, which is not very good for the industry.”

At the same time, new figures from the Telecom Regulatory Authority of India showed Reliance Jio added more than 5.6m mobile subscribers in November.

That means it now has a total of almost 370m users, or more than 32% of the market.

The subsidiary of Reliance Industries launched in September 2016 offering cut-price phones and data plans.

Its entry into India’s telecom sector triggered a major shake-up in the sector which saw most of its competitors shut down or merge.