Is it time for Reliance communications to do rethink a lot of their strategy? Battle of the Ambani Brothers is on, Rcom vs Jio vs others?

The news is that Reliance Group chairman Anil Ambani has “voluntarily” decided not to draw any salary or commission from debt laden flagship firm Reliance Communications (RCom) in current Financial Year as the as the company is reeling under debt of ₹ 45,000 crore and is facing credit downgrades.

“Decision is part of Company promoters’ commitment to Strategic Transformation Program, said a company spokesperson. His decision comes weeks after the company reported a ₹ 966-crore loss for the quarter that ended in March 2017.

The top management of the company has also decided to defer their personal pay by 21 days till the end of this year.

RCom is facing stiff competition from other telecom service providers, including the recent-entrant Reliance Jio owned by his brother Mukesh Ambani.

Rcom’s 2015-2016 annual report showed no salary or commission paid to the chairman except sitting fee of ₹ 5.6 lakh for attending board and committee meetings.

In 2011-2012, Anil Ambani took a massive two-third cut in his salary to ₹ 5.5 crore from the four listed companies compared to ₹ 17 crore in the year ago period.

RCom has defaulted on some of the payments to lenders and it has received time till December for strategic restructuring plan under which it will get a seven-month standstill to service loans amounting to ₹ 45,000 crore.

Mr. Ambani has said that the debt burden will be reduced to ₹. 20,000 crore with two deals by September, before the December deadline given by the lenders.

“Aircel, Brookfield deals targeted to close by 30 September 2017, subject to approvals; will reduce debt by nearly 60% or ₹ 25,000 crore,” said a company statement.

Rcom shares closed up 1.4% at ₹ 18.3 in a firm Mumbai market on Wednesday, valuing the company at ₹ 4555 crore.

  communication, development, jio, telecom