The brothers fell out years ago following a dispute over natural gas reserves, and the feud intensified in 2008 when Reliance Industries Ltd. (RIL), run by Mukesh, blocked the merger between Anil's Reliance Communications Ltd. and African mobile operator MTN Group Ltd. . (See Reliance Feud Kills MTN Deal.)
But the brothers recently ended their hostilities, and scrapped a non-compete agreement, which opened the way for Mukesh to enter the communications services market.
And he didn't wait long. RIL has announced a US$1.02 billion deal to take control of Infotel Broadband, the startup ISP that has just landed a $2.74 billion pan-India broadband wireless spectrum license in the auction that ended today. Reliance Communications was also bidding in that auction but failed to win any spectrum. (See India's BWA Auction Ends in $8.2B Drama.)
RIL says it aims to be a leader in India's broadband sector, and that it will "usher in a wireless broadband revolution in both the urban and the rural areas all across the country by providing end-to-end data solutions for business enterprises, social organizations, educational, and healthcare institutions and Indian consumers." (See RIL Takes Over Infotel.)
Mukesh Ambani's re-entry in the telecom sector is likely to give goosebumps to all the existing players. Under his leadership, Reliance Infocomm kick-started the current mobile services revolution in 2002-2003 by offering cheap rates to the masses for the first time. This, in turn, forced the other operators to reduce their tariffs, fueling mass demand. Today, India has more than 600 million mobile connections, compared with about 30 million in early 2004. (See India to Up Global Capex?)
— Gagandeep Kaur, India Editor, Light Reading