Mukesh Ambani, India’s wealthiest man, will re-enter the country’s telecoms market, pitching him into direct competition with his younger sibling, Anil.
Reliance Industries, the older Ambani brother’s flagship, announced on Friday it had agreed to buy out Infotel Broadband Services, the only company to have won a national allocation in an auction of spectrum for fourth-generation mobile broadband services.
The spectrum auction, which closed on Friday, and an earlier sale of third-generation mobile spectrum that ended last month, have netted India’s exchequer $23bn. While this is seen as a success for Pranab Mukherjee, finance minister, the outlay has led to concern over the health of Indian mobile companies.
India’s leading telecoms companies – Bharti Airtel, Reliance Communications, controlled by Anil Ambani, and Vodafone Essar – participated in the 3G auction. But Reliance Communications and Vodafone pulled out of the latest auction, citing the high cost. National allocations in the 3G auction reached $3.6bn, while those in the latest auction hit $2.7bn.
Anil Ambani’s Reliance Communications said it “welcomed” his brother’s entry into the market. Mukesh specialised in telecoms when he and Anil worked together under their late father, Dhirubhai Ambani.
When the brothers split their father’s empire in 2005, Anil was given the telecoms company. Under non-compete agreements signed at the time, Mukesh was restricted from entering the sector. After a legal battle, the brothers agreed last month to scrap these agreements.
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