Billionaire Anil Ambani's Reliance Communications Woes in Charts
Once a giant in India’s telecom market, RCom is now defaulting on its debt.
(Bloomberg) -- Once a giant in India’s telecom market, Reliance Communications Ltd. is now defaulting on its debt.
The mobile phone operator controlled by billionaire Anil Ambani got to this point after years of ballooning borrowing and over-spending finally caught up with it.
Competition with Ambani’s older brother’s telecom unit also played a role: Reliance Communications’ earnings slumped after deep-pocketed Reliance Jio Infocomm Ltd., backed by India’s richest man Mukesh Ambani, entered the sector offering free calls and data last year.
This has all culminated in Reliance Communications defaulting on its dollar bonds, the first by an Indian company in 15 months. These charts show some of the factors behind the stumble -- starting with one showing a drop in the firm’s earnings before depreciation, interest and tax over interest expenses:
The debt strains at Reliance Communications come amid a broader trend of increased borrowing in India’s telecom industry, as this chart shows:
Reliance Communications has fallen further in the stock and bond market after missing interest payments on debt.
To contact the reporters on this story: Denise Wee in Hong Kong at dwee10@bloomberg.net, Bhuma Shrivastava in Mumbai at bshrivastav1@bloomberg.net.
To contact the editors responsible for this story: Andrew Monahan at amonahan@bloomberg.net, Ken McCallum
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