In what is being seen as a move to put in place a succession plan, in line with some global business groups like the Walmart owners Walton family, Mukesh Ambani handed over reins of Reliance Industries’ telecom business, Jio Infocomm, to son Akash.
In a regulatory filing on Tuesday, which created ripples in the global business world, Reliance Jio Infocomm said the Board of the company had been reconstituted with “the resignation of Mr. Mukesh D. Ambani as Director of the Company effective from close of working hours on June 27, 2022 and…the appointment of Mr. Akash M. Ambani, Non-executive Director as Chairman of the Board of Directors of the Company.”
The June 27 meeting also approved appointment of Pankaj Mohan Pawar as the managing director of the company for five years, beginning Monday, and Raminder Singh Gujral and KV Chowdary as independent directors.
About two years back, during an annual general meeting of Reliance Industries, one of the richest persons in Asia, Ambani had hinted that the group’s telecom and retail businesses could be made separate through a demerger.
Akash, who’s a Brown University alumnus and the first born of the 65-year-old billionaire Mukesh Ambani, would now have to further map out the growth path of Jio Infocomm, which is India’s largest telecom service provider, closely followed by Bharti Airtel in the second place.
According to a Bloomberg report on Tuesday, for years Mukesh Ambani has studied the ways in which billionaire families, from the Waltons to the Kochs, passed on what they had built to the next generation. Recently, that process has intensified with the tycoon eyeing a blueprint for the next stage of his US$217 billion empire that seeks to avert the succession warfare that has torn apart so many wealthy clans, including his own.
Akash’s elevation comes at a time when the Reliance group, dominated by fossil-fuel profits, is pivoting towards consumer offerings. Jio, since its debut in 2016, has shaken up India’s telecommunications industry with free calls and cheap data, forcing a consolidation that whittled down carriers to three from about a dozen four years ago, the Bloomberg report further added.
Meanwhile, Indianbroadcastingworld.com is of the opinion that Akash would have his challenges clearly cut out as the head of a telecom company as another Reliance joint venture, Viacom18, would look to strategize ways to monetise the streaming rights (for India and some other parts of the globe) for IPL cricket— especially in a mobile-dominated market like India — that it obtained by paying a steep $ 3.1 billion for a five-year period.
In April, according to telecom regulator TRAI data quoted by PTI in a recent report, Reliance Jio gained 16.8 lakh mobile subscribers pushing-up its mobile user count to 40.5 crore. Overall, India’s total wireless subscribers count increased marginally to 114.3 crore at the end of April 2022.
Now this is the subscriber base that Jio Infocomm, under Akash Ambani, would like to exploit to help Viacom18 (a joint venture between Reliance Industries and Paramount) roll in revenues, while also using the IPL property to lure in additional customers.
In the meanwhile, Mukesh Ambani will continue to be the chairman of Jio Platforms Ltd, the holding company for Reliance’s digital businesses, including Reliance Jio Infocomm.