The two Ambani brothers — Mukesh and Anil — were “made for each other” as they needed each other to get ahead in the telecom sector. For Mukesh, the advantage was getting readymade infrastructure: a 120,000-km fibre optic network at the throwaway price of `1,200 crore to roll out 4G services.
And for Anil, a buyer at last when there were no others on the horizon. As one analyst put it, it was a win-win situation for both, but it was on the basis of commercial considerations, not brotherly love!
Future developments will show if a personal relationship will bloom between the feuding brothers along with commercial ties. That more such deals are in the offing became clear with the agreement clearly stating that in future both Mukesh’s Reliance Jio Infocomm and Anil’s Reliance Communications will use the present and future infrastructure of both on a reciprocal basis. This is what enthused stockmarkets on Tuesday. They were waiting for such an announcement for over a year, ever since it was suggested Reliance was considering using RCom’s towers. But that stalled, as the price Mukesh was ready to pay was reportedly too low.
What’s good for the Ambani brothers may not always be great news for the telecom sector, as Mukesh’s entry is likely to stoke a tariff war. In his earlier avatar in telecom before the family split, Mukesh had turned the unfriendly tariff structure on its head. So just wait and watch!