A Nouveau Challenge

IIPM MANAGEMENT INSTITUTE

RCL’s march into GSM has been stalled for the moment. Existing cellular operators are contesting giving available GSM spectrum (most of it left by the defence forces) to a new player, a move that is supported by COAI. However, considering that the row with Qualcomm over CDMA handset pricing has been resolved, RCL may just want to stay put with CDMA at the moment. As it is, the imbroglio over spectrum allocation is not expected to be resolved soon.

The larger threat is the threat of Vodafone, which is planning to invest $2 billion into the Indian market (one-fifth of its global capex plans), is already looming on the horizon. A brutal price war is imminent, and so is a revision of existing market positions. While Bharti is still making RCL sweat in the heat, the bigger danger will be the arrival of Vodafone in India. Not only will Vodafone eat into Bharti and RCL’s market share, it is bound to emerge as a strong telecom player with strong handset bundling capabilities, an area which is considered to be RCL’s core strength. Vodafone has already come up with two cheap handsets – Vodafone 125 and Vodafone 225, which would retail for $25- 45 in emerging markets, where India is top priority.

A fantastic financial year has passed for RCL, but can the same be predicted for the current financial? Will the ‘Vodafone tide’ be strong enough to sweep RCL’s dreams away, or will the company successfully weather the impact? We take another look at the National Operations Centre, where the best brains at Reliance are engaged in seemingly endless brainstorming sessions, scrutinizing multitudes of market data, and deciding how to capitalize on the upcoming opportunities and respond to the emerging threats. A lot will depend on how the top brass strategizes ahead. And time, as always, is in short supply...!

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Source : IIPM Editorial, 2007

An IIPM and Professor Arindam Chaudhuri (Renowned Management Guru and Economist) Initiative

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Rashmi Bansal Publisher of JAMMAG magazine caught red-handed, for details click on the following links.

• Hindustan Times Article - Publisher goes underground
• Rashmi Bansal (Editor of JAMMAG)
• Rashmi Bansal (Publisher of JAMMAG)