Mumbai and New Delhi - Reliance Industries, controlled by India’s richest man, will start a $12 billion (R129bn) telecommunications network next year to meet voice and data demand in the world’s second-most populous nation.
The company, which also runs the world’s largest crude oil refining complex, would offer so-called fourth-generation services covering 5 000 cities and towns and more than 215 000 villages, chairman Mukesh Ambani told shareholders yesterday at the firm’s annual general meeting in Mumbai. The network would eventually span 600 000 villages, he said.
The roll-out will mark the return of Ambani to a business he handed to younger brother Anil Ambani nine years ago as part of a split following a family feud. Telecoms is part of an expansion plan that includes the group’s traditional businesses of polyester, petrochemicals, refining and natural gas.
“Ambani’s focus on telecoms and the non-oil businesses stand out in his speech this year,” said P Phani Sekhar, a Mumbai-based fund manager at Angel Broking.
“Non-oils will define Reliance over the next five years. But the market wants quick results, and a three-to-five-year timeframe doesn’t excite investors too much.”
Reliance’s shares fell as much as 2.2 percent to 1 066.60 rupees (R190.55) and traded at 1 071 rupees as of 1.10pm in Mumbai.
The stock had risen as much as 1.1 percent just after Mukesh Ambani began his address.
The benchmark S&P BSE Sensex, on which Reliance has the highest weighting, declined 1.2 percent.
Four years ago, Mumbai-based Reliance had paid 48bn rupees to gain control of Infotel Broadband Services, just hours after bidding for nationwide wireless broadband licences.
It later said it would use a fourth-generation technology called long-term evolution to offer wireless broadband services. Reliance’s investments in telecoms and other non-energy businesses, including retail, come as natural gas production from its biggest deposit wanes.
The firm and its partner BP are waiting for the government to raise local gas prices after a decision was deferred on orders of the Election Commission in March.
India has a new government following elections last month. - Bloomberg