Friday, December 14, 2007

An open letter to Mr. Anil Ambani

Dear Mr. Anil Ambani,
I am writing this letter not only because I have invested money in your companies but also because I trust that you are a noble person and you should do much more than what you are doing now.

To be very honest, I never trusted that you can be a good businessman. After your split with your brother, I was happy that you didn't get a chunk of RIL (Reliance Industries). I felt that such a huge empire should be with your elder brother, Mr. Mukesh Ambani, who has got better business acumen. Unfortunately, your brother has proved me correct. See what great plans he is executing. He is setting up Jamnagar refinery, which will be the largest refinery in the world. He is venturing big time into oil and gas exploration. Very soon, he is going to compete with the world biggies on the retail front and that too on a massive scale. Not to forget his previous achievements, he has setup the telecom empire, which you are controlling, from scratch. The important thing about these investments is that he is foraying into the fields where small businesses can't easily enter.

Coming to your achievements, during this period, I feel disappointed. You have forayed into many fields but I don't see any long term vision in your projects. It is good that you have put your money in few SEZs. Your elder brother has also done the same. He will use Haryana, Mumbai and Jamnagar SEZs to power his retail drive. But, I don't see any strategy behind your investment of 12,000 crores in two SEZs in Tamil Nadu, one of which will purely be an IT park. Your Noida SEZ has been put on backburner because of your alliances with a political party, which are not in power anymore. In my opinion, big businesses can't afford to have alliances with political parties because these alliances produce more enemies than friends.
Regarding Reliance Communications, I understand that the royalty you pay for CDMA technology is costing you in revenues. But your company is number THREE even in terms of number of subscribers. THREE doesn't suit Reliance brand. To improve your position, you want Reliance Communications to move to GSM. Not a problem. But I don't see any movement. You are starting your GSM operations in just two circles. Come on! You are Reliance! Enter with a bang! I believe you are confused- on one hand, you are bearing loss of revenues because of royalty for CDMA , on another hand, you have superb infrastructure of CDMA, which will help you in providing 3G services and that is holding you back. But dear sir, if you don't sort this confusion soon and come out with full force, your position (and brand) in telecom market may get hurt.

I don't say that you have no achievements. Reliance energy is doing well and so is RNRPL. I hope Reliance Power, which will be christened soon, will also follow the suit. I loved your decision to invest in Mumbai Metro, which needs huge money power. But I equally disliked your decision to invest in Adlabs. After the split, you might have got some tens thousands of crores. You could have utilized this opportunity to build some big businesses, which are not plausible for small capitalists, but you chose to think small and purchased Adlabs.

Dear Sir, I don't write this letter to frustrate you by comparing you with others. I write this letter because I seriously want you to perform better. As an Indian, I want that you should venture into big projects to boost our economy because in our country there are very few people who have resources like you.

With the current track record, although you may prove yourself to be a good investor, you will not become what your father was… A Visionary!

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