Reliance Communications to split GSM unit from CDMA

[mmadhankumar]

Reliance Communications is undergoing a new round of restructuring, aimed at separating the mobile phone major's growing GSM business from the lagging CDMA operations, which could even be sold off at a later stage to pare debt.

People familiar with the matter said Nilanjan Mukherjee, currently the chief marketing officer, is set to head the CDMA business of the company, which was once the second-largest mobile phone operator in India but has since slipped to fourth. Former Bharti Airtel zonal head Ramesh Menon will be joining on Monday to handle GSM. Both will report to Gurdeep Singh, the current chief of the company's wireless operations.

An e-mail to Reliance Communications went unanswered. The people quoted earlier said that the separation of businesses, part of the third company-wide rejig exercise since December 2011, is taking place in the wake of the CDMA business - a shrinking technology globally for voice but efficient for data - requiring a strategy independent of the GSM unit. Nearly 80% of mobile phone subscribers in India use GSM technology while the rest are on CDMA.

One of the people said the company may look for a buyer for its CDMA business given it has spectrum and certain assets that may be valuable to someone launching 3G services. This would bring in much needed cash to bring down the company's debt, which stood at Rs 41,170 crore at end of September. The CDMA licence expires in six years.

RCom started with services on the CDMA platform but began offering mobile services on GSM as well after operators were allowed to offer both technologies in 2008. The company is increasingly trying to push voice traffic on GSM, leaving the CDMA bandwidth free for the growing data business.

The fresh restructuring not only intends to split the two technologies, but also create circle specific managements to carry through more regional focused strategies and plans, said one of the people quoted.

"One year ago we decided the organisation will be spectrum-led, and to move away from the one-size-fits-all (model)," the person added. He further said that circles are now empowered to run their own sales, finance, HR, legal, and network (departments).


More: Reliance Communications to split GSM unit from CDMA - The Times of India