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It was a significant year for Reliance Communications as the company recorded an increase of 71% in its net profit. And an increase of 28.8% in its revenue, which is Rs 18,638 crore in fy 2007-08.

The company also gave ESOPs for the first time to over 20,000 employees. This is believed to be the largest ever ESOP by an Indian telecom company.

Reliance considerably increased its global footprint in the year gone by. The company forayed into the international mobile market with the acquisition of Uganda-based Anupam Global Soft. Reliance is targeting to invest Rs 2,000 crore in this venture.

With Africa emerging as an important destination for Indian service providers, Reliance is also in talks with MTN. If Reliance and MTN merge, it will create one of the leading telecom group in emerging markets. Last year, Reliance had tried to take over Hutch Essar as well, which finally went to Vodafone.

Reliance 3

In keeping with its global vision to be among the top five global datacommunications enterprises, Reliance acquired UK-based global managed network services provider, Vanco Group, through its subsidiary Reliance Globalcom. Last year was also the year of acquisitions for Reliance Communications. The company acquired eWave World, a 4G operator focused on emerging markets across Asia, Latin America, Western Europe, and Africa.

A significant deal for Reliance was the formation of a JV company with Alcatel Lucent to offer managed network services across the globe.

Recently, Reliance announced `unlimited free STD calls' initiative for its existing and new customers across post-paid, pre-paid, and Hello fixed wireless phone customers. Earlier, Reliance had created history by announcing Unlimited Free Local calls, which remain a significant benefit for its customers. Reliance also tied up with Yatra.com to offer hotel and air ticket bookings on mobile.

The company also launched Blackberry wireless solutions for the first time on CDMA in India.

Reliance came together with HDFC Bank to offer Reliance mPay credit card, which is the country's first virtual credit card available to Reliance mobile users.

In a landmark deal, Reliance partnered with Microsoft to deliver IPTV in India on the latter's mediaroom platform. Reliance Communications will have the exclusive deployment rights for the platform in India. The deal is believed to be worth around Rs 2,000 crore.

We have earmarked a capex of $2.5 bn for network expansion

President (personal Business),
Reliance Communication

SP Shukla

Address: Dhirubhai Ambani Knowledge City, I-Block, Thane-Belapur Road
Koparkhairane, Navi Mumbai-400710
Tel: 022-30373333
Fax: 022-30386799
Website: www.reliancecommunications.co.in

Highlights

l Plans to cover over 5.5 lakh villages with over 70 crore rural Indians
l Acquired UK-based Vanco and Uganda-based Anupam Global Soft
l Expansion plans supported by committed capex of over
Rs 45,000 crore
l Received start-up GSM
spectrum

What would you say were the highlights of the year gone by, and your achievements during the period?
Our main achievement last year was that we received the start-up GSM spectrum. We added over 18 mn subscribers last year to reach a customer base of over 46 mn. Also we emerged as the most profitable telecom company in the country by delivering an EBITDA margin of over 43% during FY 2008. We also forayed in the international mobile market with GSM licenses in Uganda and Sri Lanka. And announced ESOPs for over 20,000 employees.

We also consolidated our global telecom business under `Reliance Globalcom'. During the year, Reliance Communication was by far the best performing telecom stock in the country, as well as a leading telecom stock in the world. We ranked among the five most valuable telecom companies in Asia.

Reliance Communications remains the only company in the Indian telecom services sector to reward and recognize all shareholders. We declared a maiden dividend of 10% last year, now enhanced to 15%, which will accrue to RCom's over 2 mn shareholders for FY 2008. Our focus is profitable growth. So we're not too enamored with just adding numbers, we are also interested in seeing that we protect our bottomlines and our profitability. All in all, it was a significant year for us.

Most service providers are betting big on the rural segment. What are your plans?
Our network is currently available across 20,000 towns and more than 4.5 lakh villages. In the next few months, we will cover over 5.5 lakh villages accounting for over 70 crore rural Indians. If we speak of just the wireless space we think that this year we would add over 100 mn customers for India as a country.

We have accelerated our rural networking efforts and Reliance's pan-India 1,20,000 km fiber optic integrated robust network will soon cover over 6 lakh villages and 98% of their population in rural India. For this, we have already earmarked a capex of $2.5 bn for our network expansion plans.

How do you plan to consolidate your position in the current year?
We plan to expand and consolidate our position on both national and international fronts. Our expansion plans are supported by committed capex of over $11 bn over the current and previous year. This amounts to the largest capital expenditure in the telecommunications history of this country. It is almost equal to the aggregate capex committed by all other Indian telecom companies put together. RCom expects its capex intensity to significantly reduce from next year, and simultaneously return from these substantial investments will rise in a significant manner starting the next financial year.

Reliance Globalcom recently acquired UK-based Vanco and Uganda-based Anupam Global Soft. Are there more acquisitions in the offing? Are you looking at acquisitions in India as well?
We are open to any favorable and synergetic opportunities in line with our scheme of things, which would emerge nationally and internationally. We are looking at strong growth in the Indian wireless space and an even greater set of opportunities across a range of businesses in India and globally.