How are things between Mukesh Ambani, Anil Ambani? It's tough to guess

So much water has flowed under the bridge for the Ambanis in the last one year. Anil Ambani, on Tuesday at the Reliance Capital annual general meeting (AGM), termed falling wireless telephony rates as "creative destruction" and not a "disruptive factor" and said that he would fight the attempts to thwart Reliance Communications' revival strategy. He warned that the consolidation in the telecom industry would lead to a drastic reduction of choice for Indians.

Who is thwarting RCom's revival plans? The game changer in the telecom industry was his elder brother Mukesh Ambani's Reliance Jio in the last one year. The incumbents - Airtel, Vodafone and Idea - were fighting Jio with tooth and nail, deeply cutting down their margins. The cut throat competition has burdened them at one side when debts were accumulating at the other. Its true that the entire industry has been in the doldrums, not only RCom, in the last one year.

Ambani said, "At every stage, there are legal challenges - motivated regulatory challenges that are creations of public interest litigations. There is intensive corporate rivalry." He added, "wireless sector from a hugely customer-friendly, choice-driven, 10-player market is slowly moving towards what is referred to in economic terms as either oligopoly, duopoly or potentially a monopoly."

In early July, RCom blamed Jio directly as the reason for financial stress in the telecom industry. "the telecom industry's current financial problem to some extent can be attributed to the entry of a new telecom operator (Jio) and its strategy of offering freebies to gain customer and market share," the company said in a notification to the BSE.

About a year back, Ambanis had a better warmth in their relations than today (at least in their comments on each other). Anil Ambani said in September 2016 that his telecom company had "virtually" merged with Reliance Jio. "Our spectrum is shared, our network is shared, our fibre is shared, our towers are shared, our voice is shared," he explained while responding to shareholder questions at the AGM of RCom. It was just a few days after the lauch of Jio's commercial operations.

Mukesh Ambani said in an interview to The Economic Times, he was "happy" that they overcome all their past issues at the family level, but added that their businesses were separate. But broadly these statements were seen by the market as a reunion and they expected the elder brother would be there again for the younger. There is no information in the out about the brothers' present personal equations. Mukesh Ambani is busy building his telecom empire, fighting it out with the incumbents.

It's true that RCom struggles to find a space when the biggies consolidate their positions. RCom has been pursuing a three way merger involving Sistema Shyam Teleservices and Aircel for more than a year. Also, it has been trying to sell the tower unit Reliance Infratel to Canada's Brookfield to partly repay the debt of over Rs 45,000 crore. Anil Ambani's telecom business has been shrinking in big size for last couple of years - RCom made a standalone loss of Rs 1796 crore in the last financial year, compared to its peak profit of Rs 4803 crore in March 2009 and its net sales fell by 35 per cent to Rs 8823 crore in this period. The media reported in May that RCom defaulted on its loan servicing obligations with more than 10 local banks and some of whom categorised the exposure as "special mention account" in their asset books.

In June, Anil Ambani said that the lenders have given Rcom time until December to sell its towers to Brookfield and merge the wireless business with Aircel. The remaining three more months are going to be tough for RCom.