DNA Edit | All in the family: RCom- Jio deal is homecoming for Anil Ambani

It was a particularly distressing time for Anil Ambani’s telecom venture RCom, which was saddled with a debt of Rs 45,000 crore and facing bankruptcy proceedings. Elder brother Mukesh Ambani’s generous bailout package of Rs 23,000 crore will save the ailing company from immediate embarrassment. The financial relief also signals the departure of RCom from the consumer telecom space, which will now be taken over by Mukesh’s Jio. This is a foregone conclusion, given the fact that RCom had stopped its consumer 2G and 3G operations in November, focusing instead on the sale of its assets.

For months now, Jio, the behemoth, has been rewriting the rules of the game, sending competitors like Vodafone and Airtel into a tizzy. With Anil’s company coming into its fold, the scope for expansion and consolidation increases further, in terms of 4G spectrum, towers and optic fibre assets. After a dazzling start, RCom had, at one point, become India’s second largest mobile operator, only to lose the plot in the subsequent years. What did further damage was RCom’s failure to merge with Aircel — a move that would have cut its debt by Rs 14,000 crore.

The Canadian firm Brookfield too opted out of a subsequent deal. With this bailout money, Anil can make peace with his lenders, primarily the State bank of India and the China Development Bank. Jio had surpassed 15 bidders, such as Airtel, Vodafone India, Idea Cellular, which were eyeing RCom’s assets. The market, too, responded positively to Jio’s offer, with RCom’s shares closing at 7.72 per cent higher at Rs 30.96 on the BSE on Thursday. A decade after they had split acrimoniously, the two brothers came together for mutual good.