Archive for March, 2015

Rs. 1.1 Lakh Crores generated from Spectrum Sale

March 26, 2015

The spectrum sale is over. After the auction which lasted for almost 3 weeks and was conducted in 115 rounds, the government generated a record amount of Rs. 1.1 lakh crores. The major telecom companies like BhartiAirtel, Vodafone and Idea Cellular fought fiercely along with the new entrant, Reliance Jio Infocomm,which had indicatedfrom the beginning that it will be a toughcompetitor. The acquired spectrums will last for 2 decades.

Due to few petitions regarding the spectrum sale filed in the Supreme Court, the apex court has restricted the government from publicly announcing the winners and details regarding amount spent and circles bought. After hearing the matters today, the government will be directed to reveal the figures.

In February, last year, a similar sale had happened through which the government earned around Rs. 61,000 crores. The telecom companies fought fiercely to retain the significant 900 MHz spectrum. The companies feel that the high bids will affect their profit margins and compel them to raise their rates for voice and data services.

Reliance Jio’s preparations for 4G

The telecom arm of Mukesh Ambani’s Reliance Industries is just a step away from the much awaited roll out of 4G services. In the beginning of March, this year, the company started providing beta version for the 4G services. This means that the company has given the ready services to a selected group for testing purpose.

In the previous month, the services were given for testing, being in an unpolished stage. Reliance Jio finished the TSTP (Test Schedule and Test Procedure) for its 4G services. This was done covering 20 regions and a speed of 29 Mbps to 34 Mbps was provided.

The current tests will extend for a period of 1 month and 10 days. The services will be tested by employees and vendors. If the results are positive, then Reliance Jio will check for certain cities where the services will be officially launched. As per plans, the launch is scheduled between July and September.

Apart from the voice and data services, many other applications are being tested. One of these is the Jio Drive which will let the consumers make video calls. Some other apps are magazine store, entertainment store, movie store, etc. which will let the user read magazines, watch movies or listen to music in one click.

With an investment of Rs. 70,000 crores, Reliance Jio aims to cover 5,000 towns and cities and around 215,000 villages across India. It is targeting more than 90% of the urban areas.It will also set up 1 lakh base stations by the end of this year to offer pan India 4G coverage.

To attract more customers, the company will focus on enhanced services. It has planned to launch a consumer portal where users may give their details and choose the most suitable tariff plan for themselves from the range of plans offered. The company is also planning to provide 4G SIM cards at locations of the customers.

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Reliance’s GenNext to Invest in Start-ups

March 16, 2015

Last week, 11 companies graduated from the four months long course offered by GenNext Ventures, the investment arm of Reliance Industries. The organization is now focusing on mentoring and investing in other start-ups to boost their growth.

GenNext initiative

The initiative known as GenNext Innovation Hub was launched by the joined efforts of GenNext Ventures and Microsoft Ventures. 11 new enterprises underwent training in the first batch. GenNext and Microsoft have now informed that they have started accepting invitations for the next batch. Around 12 start-ups will be given training in the second batch. The two companies did not invest in any of the start-ups from the first batch.

GenNext Ventures Managing Partner, Vivek Rai Gupta expressed his surprise over the quality of start-ups that formed its first batch and also on the way they adopted the training.

For the upcoming batch, Reliance Industries and Microsoft will be mentoring equal number of companies. The training session will take place at the same facility created by Reliance Industries at its campus in Navi Mumbai.

Microsoft India’s Director for start-ups, Kattayil Rajinish Menon, informed that Microsoft is not willing to invest in any of the companies that will undergo mentoring in the program.

Investment plans of Reliance Industries

Along with training, Reliance Industries had also announced of investing in the start-ups. Gupta said that it will be investing now in the companies of the second batch. He also informed that the company was not prepared for it when training the first batch and was itself in a learning process. But now, with the initial experience, it will start gearing up the investment plans. He also said that after VC funds have been introduced, 30-40% of the companies have received commitments.

Reliance Industries is more likely to invest in companies that give technological solutions and are associated with the fields of finance, energy management, home automation, security, healthcare and automobiles. Earlier, GenNext invested in two start-ups. However, these were not a part of the first batch. The company will be interested in investing in companies that will be related to its forthcoming 4G launch. Besides, it will also invest in companies that are involved in ‘core business.’

GenNext will adopt a flexible structure while investing. The company is mainly focused on providing opportunities and hence will be taking up only smaller stakes that may extend up to 15%. Gupta is confident that if Reliance’s name is associated with a start-up then it will help to expedite the growth of its business as other financial investors will also be attracted towards it. “If we invest, we think our validation is a good stamp of approval and there are a lot of venture capitalists who will top up with their funding,” he added.

Reliance Industries wishes that the investment which it makes should benefit both, the start-up as well as itself. He also said that Reliance Industries will be adding value to the company’s name while the company will give technological solutions and services for its future projects.

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CCI approves Pact of Reliance and RuYi

March 9, 2015

Reliance Industries Limited had proposed to enter into a joint venture with the Chinese company, RuYi. The Indian body that regulates fair trade, Competition Commission of India (CCI) has given its nod for the deal. CCI said that there is no anti-competitive issue raised through the deal. The Chinese company will now hold 49% share in the textile arm that will be incorporated by Reliance Industries as its wholly-owned subsidiary.

Joint venture

Reliance Industries will hand over its stakes to Shandong RuYi Science and Technology Group Company Limited. Its newly-formed textile arm will be now be partially owned by RuYi’s subsidiary, CSTT Co. Holdings Pte. Limited that is a Singapore based company. Reliance’s textile business will now be handled by the subsidiary.

Chinese textile company, RuYi has a subsidiary in India known as Georgia Gullini Fashions Private Limited. The license for ‘Georgia Gullini’ trademark has also been approved. On the other hand, the brand Vimal, that is the trademark of Reliance Industries will also be licensed to the textile organization.

Approval by CCI

CCI released an order on 5th March. The letter mentioned that the proposed deal will have a good effect on the competition in the industry.

It also said that both the companies are indulged in shirting and suiting business for men. They also deal in fabrics for trousers along with readymade trousers for men. In these sectors, the contribution of both RuYi and Reliance Industries is not very important. On 7th January, the regulating body got a notice from CSTT that waited for its approval.

Textile business of Reliance

Reliance Group started its business with textile. Today, the company has grown into $75 billion giant business. The company now plays a significant role in sectors of energy and retail. It is also extending its reach in the telecom sector. Reliance’s textile arm deals into manufacturing of yarn and also makes fabrics for shirts, trousers and suits of men.

Dhirubhai Ambani started the textile business of Reliance. Its first manufacturing sector is the Naroda Manufacturing Division which is situated near Ahmedabad in Gujarat. The brand Vimal then got large popularity in every house. Only Vimal is said to set up the first prominent retail chain in the country. With technology and innovation, the company’s textile business has grown a lot.

About CCI

To maintain fair competition in the market, CCI was formed under the Competition Act in 2002 which was amended in 2007. It encourages healthy competition among varied players and helps to benefit the customers through this. Stiffer competition compels companies to provide better quality products in cheaper prices.

The central government initiated the CCI on 14th October, 2003. 6 members are positioned by the government who are headed by a chairperson. The commission is obliged to prevent unfair practices, help consumers, foster competition and let marketers enjoy free trade. It also advises, creates awareness and provides training to the people and traders.

No Injuries in Reliance’s Pipeline Fire

March 3, 2015

A pipeline carrying gas caught fire near Zaheerabad that is located in the remote part of Telangana. The fire occurred due to a gas leak in the section of the pipeline that belongs to Reliance Gas Transportation Infrastructure Limited (RGTIL). The leak occurred in the Main Line Valve (MLV) 14 and the fire was noticed, in the wee hours of Monday.

The pipeline was carrying gas from East Godavari District’s Kakinada of Andhra Pradesh to the company’s facility in Bharuch of Gujarat. The pipeline was immediately plugged in Sadashivpet Mandal’s Maddikunta village of Medak district in Telangana.

Current situation

Efforts are being made to control the fire and isolate the affected section of the pipeline. A spokesperson from the company informed that the fire will be doused within few hours.It is expected that the downstream customers will get a low or interrupted gas flow for a day.

As the leak has been fixed, there is no reason for any worry. Besides, there is no injury or loss reported.

Efforts of Reliance

At 2:30 a.m., security personnel of Reliance, monitoring the spot, noticed a leak in the pipeline. He then immediately reported to Sadashivpet police station. As soon as the company was informed about the fire, it sent its experts to the War Room and the fire site. Within few minutes, the officials of Reliance in Mumbai called its technicians to reach the spot. The technicians were present in the nearby area. Besides, the company also called up police officer of Medak district.

The DSP of Tirupatanna, Sangareddy, informed that as soon as sparks came out of the pipeline, the situation was brought under control. The officers from Reliance immediately cut the gas supply to the associated pipeline in order to prevent any major accident. For enhanced precaution, the company opened two nearbyvents. These vents were positioned at Indresan that is near Patancheru and Madhri that is near Zaheerabad. Through this step, the gas was released in the air.

Police and officials of Reliance instantly roused to action and alerted and vacated the nearby colony of Maddikunta. Besides, the two worked together so that none of the villagers come near the area of the leaked pipeline. Post the leak, gas supply to the power plants of Gujarat and Uttar Pradesh were also stopped.

After the fire is completely extinguished, MLV – 14 will be isolated. Investigation will take place for its internal functioning and then downstream customers will be supplied the gas, normally. The company has already informed all the authorities and customers that may be affected due to the blaze.

About RGTIL

RGTIL is a part of Mukesh Ambani-led Reliance Industries Limited. The company deals in transmitting and distributing Natural Gas in India. Its East-West pipeline is the biggest Greenfield pipeline development that a company has ever handled in the country. The company has changed the face of gas transmission in India.

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