RCOM to move 5,500 staff off rolls
Apr 14, 2014
Source : The Times of India

 

MUMBAI: It's time for over 5,500 employees of the Reliance Group flagship Reliance Communications (RCOM) to bid adieu to Dhirubhai Ambani Knowledge City (DAKC). Many of them had boasted of pumping chairman Anil Ambani's hands at the DAKC, when he took over the reins of the company after the demerger of the family empire in 2005. This, Ambani had then admitted, beat the record number of handshakes he did at his wedding reception.

The billionaire industrialist has chalked out a five-pronged strategy to make the telecom elephant dance. He plans to right-size, sell global businesses, securitize Reliance Jio's receivables, cut costs and monetize real estate assets to make RCOM a leaner, profitable and eventually a debt-free company.

A detailed questionnaire sent to RCOM for a comment on these developments remained unanswered.

Right sizing

The loss-making, debt-laden firm plans to shift 5,500 of its call centre employees to a third-party BPO in a massive restructuring exercise to make the company. This comes after the company outsourced its network management services to Ericsson for north and west India and Alcatel-Lucent for east and south India, moving 9,500 employees to its partners' rolls. The company has reduced the headcount from 25,000 in 2012 to less than 10,000 now. Another 5,500 going off the company rolls will leave RCOM with less than 5,000 employees.

The company has restructured its top management by roping in Vinod Sawhny as CEO of RCOM, William (Bill) Barney as CEO of Reliance Globalcom and Wilfred Kwan as COO of Reliance Globalcom.

Globalcom sale

After multiple failed attempts in the last three years to sell its overseas submarine cable firm Flag Telecom or list it globally, RCOM has renewed its focus on offloading its overseas business. It merged three of its offshore businesses — Flag (carrier), Yipes (voice) and Vanco (enterprise) — under Reliance Globalcom, which has been restructured and rebranded as Global Cloud Exchange in the hope of fetching valuations in excess of $2 billion, or Rs 12,000 crore, sources said. The company expects the benefits of the merger to flow into the balance sheet in two quarters as valuations are likely to go up once it expands its assets.

RCOM has also divided Global Cloud Exchange into Indian and global operations so that a stake sale does not affect the flagship's balance sheet, the sources added. Reliance Globalcom had bought Flag submarine cable network in 2003 for $210 million, US-based web services provider Yipes in 2007 for $300 million and European virtual network operator Vanco in 2008 with revenues of $365 million.

Last month, the company roped in Barney and Kwan from Pacnet, giving rise to speculation among employees that Global Cloud Exchange will be eventually taken over by Pacnet.





Securitizing receivables from Reliance Jio

RCOM has signed three back-to-back deals worth Rs 17,200 crore with Mukesh Ambani-led Reliance Jio for sharing towers (Rs 12,000 crore), inter-city fibre (Rs 1,200 crore) and intra-city fibre (Rs 4,000 crore). Having already securitized Rs 1,200-crore receivables from the inter-city fibre-sharing deal, the company is now in talks with banks to securitize the remaining Rs 16,000 crore worth of receivables.

Monetizing real estate

RCOM has decided to unlock Rs 12,000 crore by spinning off real estate into an independent unit, Reliance Properties, which will be listed separately, the sources said.

Cost-cutting and smart capex

The Reliance Group flagship plans to cut network and gross acquisition costs by 10-15%. The company substantially improved its network coverage by signing inter-circle roaming pacts with other operators through a 'pay as you use' model without incurring additional capex and opex. Through the ecosystem of 10,000 sites to be shared on a bilateral basis, the company sees an additional market opportunity of Rs 10,000 crore.

 

Latest Realty News

Land prices in Mumbai touch new high
Apr 14, 2014
MUMBAI: Acute land shortage in Mumbai has led to a ridiculous situation where plots fetch astronomical rates. On Monday, a 25-acre sprawl belonging to Tata Steel in the suburban Mumbai invited the highest bid of Rs 1,155 crore. Over the past decade, as the housing shortage became more severe, the city recorded phenomenal property transactions. Fours years ago, a land parcel sold for over Rs 4,000 crore, a national record of sorts.
Man arrested for murder of real estate agent
Apr 14, 2014
MUMBAI: The Nerul police has arrested a 33-year-old man for the murder of a real estate agent who had been found dead on April 5. The man allegedly committed the crime over delay in payment for his work.
RBI to banks: Follow norms on sale/ purchase of real estate overseas
Apr 12, 2014
MUMBAI: The Reserve Bank of India on Thursday said banks should ensure that all future transactions relating to purchase/sale of real estate as well as acquiring /letting out property on lease/rental basis at overseas centres are undertaken in accordance with the board-approved policy.
Panel starts talks on DP road map
Apr 12, 2014
NASHIK: The first meeting of the panel on roads for revising the draft of the city's development plan (DP) was held on Thursday with primary discussions on how the roads in the proposed DP should be.
HDIL hits 52-week high on Credit Suisse stake buy
Apr 11, 2014
MUMBAI: Housing Development and Infrastructure (HDIL) is trading higher by 2% at Rs 77.20 in an otherwise weak market after Credit Suisse (Singapore) bought over 2 million shares of the Mumbai-based real estate developer for Rs 16 crore through an open market transaction.
Real estate agent booked for rape, circulating objectionable photos of victim
Apr 11, 2014
MUMBAI: The Charkop police are looking for a real estate broker after his female friend lodged a complaint of rape on Tuesday. The 21-year-old woman also stated that the accused had clicked objectionable photos of hers and had begun sending it to her parents.
Get proactive for a home loan
Apr 11, 2014
PUNE: A home loan looks like an attractive proposition. When you see an advertisement of a bank in a newspaper, offering a very attractive interest rate, a subsequently low EMI, etc., your long cherished dream of owning a house suddenly looks achievable. With banks offering loans on attractive terms and conditions, a dream home is no longer a dream but a reality. However, before you make a home loan application, it would be better to be aware of some of the issues faced by borrowers during the h
Consider giving possession of Kurla's Premier Residency flats: Bombay High Court to HDIL
Apr 11, 2014
MUMBAI: The Bombay High Court on Wednesday asked Housing Development & Infrastructure Ltd to consider handing over possession of ready flats at its Premier Residency project at Kurla in Mumbai, saying lawyers representing the developer and home buyers should try for an outof-court settlement.
Private equity firm Milestone Capital sells Rs 145-crore Pune property to HNI
Apr 11, 2014
MUMBAI: Private equity firm Milestone Capital Advisors has sold a 2.5 lakh sq ft commercial property in Pune for about Rs 145 crore to a high-net-worth individual (HNI), marking a potential renewal of interest among such investors in assets that offer stable rental returns in addition to capital appreciation.
Sensex remains higher; Sun Pharma up, TCS down
Apr 10, 2014
MUMBAI: Indian equities remained higher in post noon trade on Wednesday on the back of higher capital inflows amid IMF's forecast of better growth prospects for India in 2014. Healthcare, realty and metal stocks witnessed a rise whereas IT stocks registered a fall. At 1.19 p.m., the Sensex was trading up 99.43 points or 0.45% at 22,442.88 with 20 components gaining. Meanwhile, the Nifty was trading higher by 19.70 points or 0.29% at 6,714.75 with 37 components gaining.

Latest Realty News Of State

Realty Talk's