RIL Head Mukesh Ambani Gives Up Rs 24 Crore in Salary For Fifth Year In A Row

Chairman and Managing Director of the country’s biggest private sector entity Reliance Industries Limited (RIL), Mukesh Ambani is setting an example for moderation in managerial compensation levels. He has kept his annual salary at Rs 15 crore , foregoing Rs 24 crore from the remuneration approved for him by shareholders.

Ambani has not deviated from this salary level since the fiscal year 2008-2009. In the recently published annual report the company said that, “The Chairman and Managing Director’s compensation has been set at Rs 15 crore as against Rs 38.93 crore that he is eligible as per the shareholder’s approval, reflecting his desire to continue to set a personal example for moderation in managerial compensation levels.”

Mukesh Ambani is eligible for a pay package of Rs 38.93 crore from the last fiscal year. His actual salary is 23.93 crore lesser than the pay package.

In the last fiscal year of 2011-2012, Ambani had foregone his salary by Rs 23.93 crore. He had decided to stagnant his salary at Rs 15 crore in Oct 2009. There was a debate on-going at that time that discussed the right-sizing of CEO salaries. He was the country’s top paid executive when he decided to cap his salary which dropped from Rs 44 crore to Rs 15 crore in the year 2008-2009.

His remuneration includes Rs 4.16 crore as base salary, Rs 60 lakh towards prerequisites and allowances, Rs 89 lakh as benefits and Rs 9.35 crore as commission.

Apart from this, RIL’s total payments towards the annual compensation for its top managerial positions for the year 2012-2013 also remained same at Rs 44 crore. This compensation was hiked from Rs 41 crore to Rs 44 crore in the preceding year. The top executives of RIL , namely Nikhil Meswani and Hital Meswani are paid 11 crore each. Other executives like PMS Prasad and P K Kapil will be given Rs 5 crore and Rs 2 crore as their annual remuneration for the current fiscal year.

Overall, the employee strength of RIL has increased in comparison to last year. So, the overall staff cost at consolidated level rose considerably to Rs 5,179 crore from Rs 3,955 crore in 2011-2012. The total number of employees rose from 23,166 to 23,519 in this current year. The company has recently hired 75 management graduates and 436 engineers from campus selection drives in the last fiscal and the numbers will rise in future.

Here, it has to be noted that RIL is coming up with its 4G services in India soon. The company will also expand its overall employee strength to take care of the future expansions in Reliance Retail and Reliance Jio Infocomm.

Reliance Gearing up to Enter India’s Defence Sector

Reliance Industries Limited (RIL) is gearing up to enter the defence space of India by investing and signing new deals with global market players to procure offset management of defenceequipments. With reports floating that there are apparent changes happening in the country’s defence procurement by giving more prominence to private sector companies, MukeshAmbani led RIL is already setting the sails according to the winds.

Reliance already has set up Reliance Aerospace Technologies and Reliance Security Solutions back in 2011.In order to come up with new strategies in the defence play, MukeshAmbani is planning to invest about $1 billion in the aerospace field over the next three years. The company is also planning to recruit2,000 engineers.

Gauging more opportunities ahead, RIL has also inked a deal with Boeing. Apart from this deal, RIL had also partnered with Dassault Aviation in 2012, to enter defence and home land security sectors in India. The country’s largest private conglomerate had applied for license to design, develop and manufacture equipments and components for military and civilian aircraft.

The objective behind both these deals by RIL was to get offset projects from global names that are looking forward to have a stake in India soon. Dassault Aviation and Boeing are already in contract with Indian Air Force and Indian Navy respectively. Dassault has to supply 126 medium multi-role combat aircraft whereas Boeing has to supply 20-24 P81 aircrafts.

Both these companies are in offset arrangement pact with RIL. According to the government’s defence procurement policy, the multi-national companies are bound to plough back to India a fixed percentage of the value of the contract they win from Indian defence.

The future of RIL in the defence sector doesn’t remain confined to winning offset projects only. It further plans to incubate tier-2 and tier-3 companies that provide components to tier-1 companies manufacturing the original equipment. According to report published by KPMG, Indian defence market is expected to be worth $94 billion by 2020. So, it is the correct time for RIL to enter this market.

The other players in this market are Tata Advanced Systems Limited, Larsen and Toubro, Kirloskar Brothers, Mahindra Defence Systems and Ashok Layland. But with RIL entering this space, as experts say, it has the capacity to replicate the same phenomenon it created in oil and gas market of the country.

Time will only tell this new defence story for Reliance Industries.

RIL’s Digital Arm To be Expanded in Tier-1 and Tier-2 Cities

Reliance Industries Limited (RIL)’s retail business arm, Reliance Retail will execute further expansion of its digital format stores in Tier -1 and Tier- 2 cities across the country. Mukesh Ambani led RIL is considering the digital sector as one of its prime contributing factors for the growth verticals of its retails business. Reliance Retail had crossed Rs 10, 000 crore turnover milestone in 2012-2013 fiscal as per the annual report of the company.

Furthermore, Reliance Digital will add more stores to its name and also come up with a new chain of stores under the brand name of Reliance Digital Express. Currently, Reliance Digital operates a total of 139 stores, out of which 46 were added in the last fiscal year. Essaying the overall performance and future of Reliance Retail, Mukesh Ambani said, “We are delighted to see our retail business achieving a milestone of annual revenue crossing Rs 10, 000 crore in FY 2012-2013. Our revenues have grown by 42 percent on a year on year basis.”

Another important thing for this retail arm is that it has turned EBITDA positive last year. In the last fiscal, the company has opened 184 new stores in the country, the total number which now reaches to 1466 stores.

RIL is keen to capture the market of consumer durables, IT and telecom (CDIT) segment ,the estimation of which is forecasted to reach Rs 2,15, 000 crore by 2016. The company is also looking forward to strengthen its client service arm ResQ along with its expansion of stores.

“Digital sector would be one of the growth verticals for the coming year. Reliance Digital Stores and Digital Express stores would be rolled out in Tier-1 and Tier-2 cities and would bring a world class shopping experience for consumers.” RIL stated in its Annual Report for 2012-2013. It also mentioned that the penetration of CDIT products in the Indian markets is comparatively slow as compared to other developing markets. But the belief prevails that as the disposable income increases, more people would adopt technology products. New technology innovations and trends will drive the replacement and overall market behavior.

The company will also focus on multi-product, multi- brand servicing at multiple locations. For this, it will strengthen ResQ, the service arm of the digital format. ResQ brings in strong service orientation towards meeting the requirements of the customers during the entire product life-cycle. Reliance Retails is currently growing at a rate of 10 percent each year.

Mukesh Ambani is keen to make Reliance Retail one of the leading retail chains of the country as well as is investing huge amounts to bring a world-class shopping experience for Indian consumers by bringing international and multiple brands under one roof.

Reliance Jio Infocomm Zeroes Down on Key Pacts For its 4G Services

Reliance Jio Infocomm, the telecom arm of Reliance Industries Limited (RIL) has cleared its mode of operation by finalizing on the key pacts that will drive the company once 4G services are rolled out all over the country. It has decided on the key agreements with its technology partners and device manufacturers prior to the launch of its 4G services. Mukesh Ambani, Chairman and managing director of RIL has said that the project has acquired the basic infrastructural requirement for its launch across India. He also stated in the Annual Report for 2012-2013 that Reliance Jio Infcomm Ltd (RJIL) will provide reliable and fast internet connectivity to citizens across the country.

“RJIL has completed the detailed planning for Pan India implementation of the infrastructure needed for the project, “he said. He also added that RJIL has also finalized key agreements with its technology partners, service providers, infrastructure providers, application partners, device manufacturers and other strategic partners for the project.

Speaking about the enormous potential waiting to be captured by 4G services, Ambani emphasized on the fact that India has the capability and talent to surpass the world and become a leader in the delivery of digital content. In 2001, there were less than 5 million mobile phone users, while today India has more than 860 million mobile users. However, the same rate of growth has not been achieved in the growth of broadband connections. “Today, broadband in India has only around 1 percent market penetration as compared to other countries”, Ambani said.

RJIL is the sole player telecommunication player in the market today that owns Broadband Wireless Access (BWA) spectrum that will be helpful in providing fast Internet connectivity across the country.

RJIL has decided to provide reliable , fast internet connectivity across the country and offer end to end solutions that addresses the entire value chain across various digital services in key domains of national interest such as education, healthcare, security, financial services , government –citizen interfaces and entertainment.

Further plans of RJIL are to use Time Division Duplex-Long Term Evaluation (TDD LTE) technology for its nation-wide next generation network deployment to provide connectivity and related digital services to its customers.

Overall, the launch of 4G services is not the only package coming fromRJIL, but it will focus on providing all the components of the entire digital value chain.

KG-D6 Basins To Get A Boost Of $5 bn From RIL

Mukesh Ambani led Reliance Industries Limited (RIL ) is going to invest $5 billion for the development of the oil and gas fields in KG-D6 blocks located near Bay of Bengal.

This investment will be used by a series of projects that will cumulatively result in higher output of natural gas and oil from these basins. In the annual report of 2012-2013, MukeshAmbani said, “We are planning to invest in a series of projects to develop around 4 trillion cubic feet of discovered natural gas resources from the block.”

Along with their European partner BP Plc, RIL has agreed to governmental plans to bring to production satellite fields in the eastern offshore KG basin block to raise the output of the natural gas and oil production. “The field development plan for the R-Series project (in the KG-block) has been submitted to the Government of India for approval. This along with other projects is expected to add incremental production in the next four to five years.” he added.

Various activities like work-overs, side tracks and compressor addition have been taken up to accentuate the current rate of production. In the existing infrastructure, the search for new blocks has begun. The production from this new-found well will add to the overall result in the next four-five years.

RIL had originally discovered 18 gas fields in the area. From this, Dhirubhai-1 (D-1) and Dhirubhai-3 (D-3) are the highest productive blocks. Various base management actions like work overs, side tracks, compressor, enhancement of water handling capacity will be taken up to maintain and upscale the productivity of D-1, D-3 and MA fields. RIL said, “ The next wave of projects in KG-D6 block are envisaged to e undertaken over the next three to five years and entail potential total investment in excess of USD5 billion to develop around 4 trillion cubic feet of discovered natural gas resources.”

There are a series of projects in the pipeline for the next phase of oil and gas development one of which is satellite discoveries in KG-block. The company also plans to invest a huge amount in the block enhancement plans.

The vision of Mukesh Ambani behind this expansion plan is to make India completely import-independent. “We believe gas from these projects will deliver energy to millions of Indians and would significantly help India in reducing import dependence.”Ambani said. The company also said that by the end of 2012, fields in KG-block had produced 2 TCF of gas and 22 million barrels that saved nearly USD 35 billion in energy imports.

Apart from this, the company also looks for new opportunities globally that strategically fit with its integrated value chain. RIL aspires to become one of global top ten independent hydrocarbon producers.

Reliance Jio Infocomm and Nimbuzz : Set to Transform the Messaging Platform

Mukesh Ambani led Reliance Jio Infocomm is gearing up for its launch by the end of this year. To make this launch smoother and faster, Reliance Jio Infocomm is striking deals for infrastructural benefits at a stupendous speed. The recent one is with Nimbuzz - the messaging platform on mobiles. This messaging platform of Nimbuzz helps to compile the phone book contacts of the mobile device with all other social media and email contacts to enable messaging on all these diverse platforms without any hindrances.

Vikas Saxena , CEO of Nimbuzz feels that this messaging platform has great potential and it can work incredibly well when gelled up with speed and 4G networks. He says, “The kind of speeds that I have seen on 4G demonstrations is fantastic. If only India allows us to launch voice over IP phone calls, Nimbuzz will be attaining new heights.” Reliance Jio Infocomm is planning to integrate Nimbuzz onto mobile devices which are separately formulated for its 4G services.

In the mobile advertising industry, the revenues have grown by 350 percent in the last year and it is expected to grow more in the upcoming years. If voice over IP telephony is allowed in India, Jio Infocomm will be able to offer voice telephony using VoIP and Nimbuzz can play an important role in designing the required apps. Jio Infocomm already has the license to offer voice telephony using VoIP, but some more clarity is needed as to how it will bundle voice telephony alongside its broadband internet access.

As per Saxena, “This deal is a win-win situation for both.” Reliance Industries Limited (RIL) has also signed deals with other players to gear up the launch of first of its kind services in India. It has signed deal with Samsung to design 4G compatible mobile phones that are priced at a medium range. To use the existing infrastructure, Reliance has also partnered with Reliance Communications to use the latter’s fibre optic cable network spread across the country. It will also use its mobile towers for the initial time phase. To reach out to International borders, a deal with Bharti Airtel has also been signed to use its submarine cable network. However, these deals will be useful until Reliance comes up with its own indigenous network. According to Mukesh Ambani, initial investment on infrastructure demanded more time and effort which was delaying the launch of the services.

Reliance Jio Infocomm will be first soft launched in metros like Delhi, Mumbai and Banglore. After this initial phase, Reliance plans to cover the whole country by the end of 2015 with its fourth generation services.

Reliance Jio Infocomm, Vodafone and five others bunch up to build undersea cable system

Vodafone Group Plc and Reliance Jio Infocomm have formed a consortium along with a group of telecom carriers to set up an undersea cable system to connect Southeast Asia with the Middle East, across the Indian Ocean.

This 8,000-km-long Bay of Bengal Gateway (BBG) undersea cable system will also have connections that would reach out to India and Sri Lanka. Other telecom carriers who joined forces include Dialog Axiata from Sri Lanka, Omantel, Etisalat from the UAE and Telekom Malaysia Bhd. The parties signed the agreement and the supply contract on April 30th in Kuala Lumpur.

This cable system when built would offer upgradeable and transmission facilities with 100 Gbps capability. The cost of the cable system, however, has not been disclosed yet. It is likely to carry commercial traffic by the end of 2014.

Some analysts predict that the upcoming BBG undersea cable system will play a crucial role in breaking the monopoly of the existing operators in the region. In addition to that, it will also minimize the cost of infrastructure for the consortium partners.

This new tie-up is critical for Mukesh Ambani’s Reliance Industries and it gears up for the launch for 4G services in India. Reliance is presently the only company to have permits for 4G services in India. It is expected to launch the 4G high-speed wireless data services later this year and is also seeking international bandwidth.

This shows how telecom companies in India are putting forth their money to set up wireless data networks in a market where only a tenth of the population uses the internet. Although use of data services is growing at a faster rate in India, 80 percent of the revenue earned by telecom carriers is still earned from voice calls.In fact, major Indian telecom operatorscollectively spent $20 billion to acquire 3G and 4G airwaves in an auction that took place in the year 2010.

BBG is a major step towards business growth since it will provide with a backing for present and potential high-end requirements of next generation Internet applications and requirements of surrounding regions.

Apart from providing connectivity between Southeast Asia, South Asia and the Middle East, the BBG undersea cable system will also provide connectivity to Europe, Africa and Far East Asia.This will be carried out through inter-connections with other existing cable systems in India, the Middle East and Far East Asia.