Reliance Infocomm, the Rs 25,000 cr dream of Dhirubhai Ambani

MUMBAI: Born out of Dhirubhai Ambani’s dream and his ambition to make it big in the knowledge economy, he fashioned a strategy, which was conceptually simple and sweeping in its impact. He encouraged the Reliance Infocomm team to look for the best technology in the world and use it to reduce the cost to the consumer.

Said Mukesh Ambani, Chairman and Managing Director, Reliance Infocomm at the launch of the initiative, " We will offer revolutionary, data, video and value-added services at a cost affordable by all, in the largest and most complex rollout in the history of the information technology and communication sector worldwide." And indeed it was the kick-off to a giant network, an enormous campus, and the boldest initiative in the Indian information and communications sector.

The goal of Reliance Infocomm is to progressively expand its optic fiber network and eventually cover 116,000 km, with the ability to seamlessly connect every individual, home, and office in all 640,000 villages and 2,500 towns and cities of India.

What exactly is Reliance Infocomm’s plan?

The first phase is to kick-off a mobile revolution, in the form of the Reliance IndiaMobile service through a nationwide wireless network. Intelligently, Reliance Infocomm is using its basic services license to do it and exploiting the wireless-based limited mobility option. Not many would have anticipated the land- to- air fight; that’s why cellular operators are singeing with pain. Once unleashed, the service is expected to witness mass consumer following and the frenzy could envelope to whole nation since the service would be launched across in one big bang.

Next, by mid-2003, Reliance Infocomm will take businesses in its sway. They call it the ‘enterprise Netway revolution’. Already, the company is ready with its data-centers, managed network services, and a host of applications like GIS, vehicle monitoring system, broadband Wi-fi applications, videoconferencing solutions, mobile ATMs, fixed wireless ATMs using CDMA, and VoIP. The plan is to provide 100 mbps Ethernet links to desktops and devices to half a million enterprise buildings initially and eventually to 10 million buildings.

By end of 2003, the time would be ripe for consumer convergence revolution by providing high speed Ethernet links to 80 million homes initially and eventually to every home. This revolution will enlighten every home with an entire range of television channels, high-speed telephony, audio conferencing, videoconferencing and video-on-demand.

This then is the overall scope of the Reliance Infocomm initiative. Of course, during the course of the time the company would also offer basic wireline telephony services nationwide, international long distance, rural telephony, manufacture CDMA-compliant handsets — all of which does not require much preparation now. Of the Rs. 25,000 crore investment planned, Rs. 15,000 crore has been raised- Rs. 6000 crore through equity and Rs. 9000 crore through debt.

Till date, Rs. 11,000 crore has been committed and it includes all of what has currently been done in terms of infrastructure, redundancy, incremental ducts for the next decade, and such. An international listing is a possibility over the next two-three years to raise further cash and unlock shareholder value.

The headquarters for all these services, programmes and operations of Reliance Infocomm is located in the Dhirubhai Ambani Knowledge City, a brand new and modern campus built on a 140-acre site in Navi Mumbai, conceived by Nita Ambani, President of the Dhirubhai Ambani Foundation. The campus hosts a national operations center, applications development laboratories, data centers and contact centers, spread over 2.2 million square feet of office space.

Gathering the men and the brains

To fulfill the scope of the Reliance Infocomm initiative, it would need mammoth human and intellectual resources. It is following a smart approach here. Branded as the ‘Dhirubhai Ambani Entrepreneur Program’, it will create an extended enterprise and a new paradigm in sales and distribution management. It will enroll 200,000 individuals committed to acquiring customers, building the brand, and provide information and feedback to the company.

Saturation advertising will create the pull and the channel would satisfy the demand. Multiple points of physical presence, branded as Reliance WebWorld ( earlier called Web Stores) - an Internet café, entertainment center, and digital products shop rolled into one, would serve as outlets.

The sheer amount of software that needs to be developed for all the applications that the company envisions is humungous. In the words of Mukesh Ambani, " from managing queues in temples, connecting all police stations to delivering e-governance solutions to all citizens" suggests the scope of application software development. Software talent, though abundantly available within the country, cannot all hope to be employed on the rolls of Reliance Infocomm. Instead, a developer programme, branded ‘Dhirubhai Ambani Developer Program’ seeks to tap into the intellectual resources of India’s software army.

In a specific comment to DATAQUEST, Mukesh Ambani said, " The programme will harness India’s formidable software talent to develop products for the local as well as global markets, in the opensource mode".

One thousand developers of software solutions are being enrolled now to eventually grow to 100,000 developers by December 2003. Reliance Infocomm will provide the infrastructure, unlimited access to comprehensive technical documentation and support and offer special rate plans designed for the developer community.

These two programs are a tribute to Dhirubhai Ambani’s conviction that the best way a business can contribute to society is by encouraging other enterprises, and creating economic opportunities for millions of young Indians.

In the final analysis, Reliance Infocomm’s strategy rests on intelligently using the provisions of the deregulated telecom environment along with the remaining regulations to its advantage to gain a start. A huge domestic consumer market would be tapped through the pricing strategy.

Having invested so much in the infrastructure, it can be used for offering enterprise solutions. Revenue streams will start from both these. Increasing scale will turn the tide in its favor because it owns a large part through which the traffic will flow. Its brand equity, brand building capabilities and saturation marketing will keep up the steam. The vision is commendable, the execution flawless till now.

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