Abstract

The case study describes the journey of Reliance Communications (RCom) from being an industry leader to going bankrupt. It also traces the history of RCom since it was founded in the 2000s by Indian business tycoon MukeshAmbani (Mukesh). Mukesh handed over the company to his brother Anil Ambani (Anil) in 2005, after the brothers divided the business of Reliance Industries, a conglomerate founded by their father Dhirubhai Ambani, among themselves. Having been a pioneer in the telecom industry, RCom, under Anil’s leadership, made a slew of investments to develop telecom infrastructure with the idea of becoming the leading player in mobile telecom in the country and offering telecom services at affordable prices. However, despite being in a strong competitive position, RCom was unable to sustain its position due to the changing dynamics of the telecom industry and the acute competition from various players in the market. The failure to maintain its momentum in the face of the ever changing market dynamics put RCom in a critical position with a growing debt burden. The launch of Reliance Jio by Mukesh, which marked his re-entry into telecom, proved to be the death knell for RCom. The present case study provides the scope to discuss the competitive scenario in the Indian telecom industry, the strategy adopted by RCom, the reasons for the failure of the company, and the future of the telecom industry in India.

Learning Objectives

The case is structured to achieve the following Learning Objectives:

• The strategy adopted by Reliance Communications (RCom)
• The reasons for the failure of RCom
• The reasons for the increased debt burden of RCom
• The recovery measures adopted by RCom
• The growing competition and changing dynamics of the Indian telecom sector

Keywords

RCom; Jio; Insolvency; Telecom Industry; Competition; Debt Crisis; Restructuring Measures; Growth Strategy; Corporate Strategy; Business Environment; Competitor Strategy; Disrpution