The amazing race

Two Reliances are better than one-at least for a news-hungry media, that would certainly seem the case. Consider:

Monday, July 16, Mumbai: Reliance Communications (R-COMM) from the Reliance Anil Dhirubhai Ambani Group (R-ADAG) sets the ball rolling when its Chairman calls a press conference to announce a major overseas acquisition. Flag Telecom, a wholly-owned subsidiary of R-COMM, has bought us-based Ethernet services provider Yipes Holdings for $300 million.

Monday, July 16, Jamnagar: At the annual general meeting (AGM) of Reliance Petroleum (RPL), the company that IPO-ed last April, and which is in the process of putting up the sixth-largest refinery in the world, Chairman Mukesh Ambani tells shareholders that RPL's effort to create the "single-largest refinery complex globally" (along with the existing refinery of flagship Reliance Industries) at Jamnagar is on track. "This will make Jamnagar the refining hub of the world," beams Ambani, adding that the complex will process two out of every hundred barrels of oil in the world.

Tuesday, July 17, Mumbai: It's AGM time for R-COMM, and the younger Ambani is full of beans and plans. R-COMM, he says, will spend Rs 16,000 crore during the current fiscal to expand and strengthen its network coverage in India and the rest of the world.

Tuesday, July 17, Mumbai: A few hours later, at a South Mumbai hotel, it's the turn of Reliance Industries (RIL) to occupy centre stage. RIL, announces P.M.S. Prasad, President, petroleum business, has made a "significant" oil and gas discovery in the very first well it drilled in the Cauvery basin, off the coast of Pondicherry.

Thursday, July 19, Mumbai: R-ADAG announces the sale of a 5 per cent stake in its telecommunications tower business. The deal, which was struck at $337.5 million (Rs 1,400 crore), will have seven investors in all from the US, Europe and Asia. The names of the investors have not been made public.

Clearly both brothers have plenty to trumpet. Take Anil's all-cash purchase of Yipes, for instance, which gives him a foothold in the global market for enterprise and institutional data services, a pie that's valued at $90 billion. "Yipes is focussed on the Ethernet, which is the fastest growing segment in the global data market. The Ethernet is a $10-billion market and is expected to grow at a compounded growth rate of over 30 per cent per annum and become a $25-billion market globally by 2010," says the R-COMM Chairman. What is more, Yipes has around 1,000 enterprise customers across four industry verticals-financial, legal, government and healthcare. The company is headquartered in San Francisco and owns over 22,000 km of fibre across 14 cities in the US.

Cut to the Cauvery deep water basin on the east coast of the country, where RIL has made the country's first ever hydrocarbon discovery, which was promptly christened 'Dhirubhai-35'. This discovery follows previous hydrocarbons finds in the offshore basins of Krishna-Godavari, Mahanadi and Saurashtra. "It's too early to compare the two discoveries. The Krishna-Godavari basin flowed only gas while this one (Cauvery basin) flowed oil as well as gas. We will get a better estimate once we drill more wells in this block but it's a very significant discovery," says Prasad.

The exploration, and eventually production, venture gives Mukesh Ambani a huge opportunity to unlock value from RIL. Anil too has similar ideas at R-COMM. At last fortnight's AGM, he announced plans to hive off the tower infrastructure into a separate company as well as a private placement for Flag Telecom, which will duly get listed. "We also plan to develop the 132-acre campus at Dhirubhai Ambani Knowledge City as a Special Economic Zone with a focus on it and it-enabled services. We also intend to create a global size business in the BPO space where we, over the years, have developed competencies in telecom, BFSI (banking, financial services and insurance), utilities and entertainment verticals," Ambani said at the AGM. A few days later, when he addressed the media, Ambani said the tower business, under Reliance Telecommunications Infrastructure (RTIL), has been valued at $6.75 billion. "The company has an asset base of Rs 12,000 crore. We have 14,000 towers which will increase to 23,000 over the next six months," added Ambani.

AGMs for Mukesh Ambani are also a stage on which to throw the spotlight on project progress, in spectacular fashion. Don't ask how they did it, but according to the RIL Chairman, "the civil concreting works at the site will consume cement equivalent to 35 CN Towers in Canada, the world's tallest building." For Mukesh Ambani, global always mattered, be it size, scale-or perspective.

(With T.V. Mahalingam)