Tata, Birla, Mukesh and no Anil Ambani
History is replete with strategic blunders that changed course of the history itself. One such blunder that comes to my mind is that of Merzifonlu Kara Mustafa Pasha, the feted Ottoman military commander and Grand Vizier. In 1683, he led a three-lakh strong Ottoman army to capture Vienna, the capital of Austria.
But the commander did not relent as he strongly believed that his side was close to a victory that would replace the Christian dominance with that of Islam in Europe. At that point of time, he was right. But at the beginning of the war, his made a strategic blunder that came back to haunt him and his massive army towards the end. The Ottoman army was stationed between Vienna in the front and Kahlenberg mountain in the back.
His military aides suggested to him to fortify the rear by digging traps for horses at the foot of the mountain so that no army could climb the mountain and launch an attack from atop it. Kara Mustafa brushed aside the suggestion saying it would be impossible for any army to get to the top of the mountain. He went ahead with his assault on the city.
As jaded Ottoman army was patiently bidding for a right opportunity to seize Vienna after a two-month wait, Jan III Sobiesk, the King of Poland, came to rescue of the city and launched his attack from the very Kahlenberg mountain in the early hours of September 12, 1683, thus taking the Turkish rivals by surprise.
That was end of the road for the Ottoman army, and its Commander Mustafa who was subsequently captured and hanged. Mustafa's decision not to pay heed to his aides' suggestion at the beginning of the Battle of Vienna, turned out to be one of the biggest military blunders that changed course of the history. Otherwise, Islam would have been the world's leading religion, not Christianity. But that's different story.
The downfall of Anil Ambani, once among the top 10 richest people in India, reminds me of the Battle of Vienna story etched in the annals of history. I vividly remember how Anil Ambani wanted to part ways with his elder brother Mukesh Ambani and chart out his own path a couple of years after their father Dhirubhai Ambani, who built Reliance Industries from the scratch, passed away in 2002.
Anil’s tryst with politics also did not go down well with Mukesh who like many successful tycoons loves to remain apolitical. But their split was acrimonious to say the least, and their mother had to step in to keep it as smooth as possible. When they finally divided their father’s diversified business empire in 2006 under watchful eyes of their mother, Anil got telecom (Reliance Communication), power and financial services while oil refining, the flagship business of Reliance Industries, and textiles went to Mukesh.
The duo also signed a non-compete agreement under which each of the billionaire brothers was barred from entering other's business domain. This agreement restricted elder Ambani from foraying into telecom business for many years.But in 2010, the Ambani brothers canceled their non-compete agreement. Perhaps, Anil underestimated his big brother by agreeing to cancel it.
For that, he paid a heavy price as Mukesh made a big bang entry into telecom sector with Reliance Jio in 2015, taking a heavy toll on other telecom players including Reliance Communication (RCom), the flagship of Anil Ambani Group.It's foregone conclusion that Anil is no match to Mukesh when it comes to business acumen.
In a recent wealth report, Hurun Research said that Anil Amani lost 65 per cent or over $5 billion of his wealth in last seven years from a high of $7 billion to $1.9 billion now. In the same period, Mukesh Ambani added $30 billion - six times of what his younger brother lost - to his wealth, thereby becoming world's 10th richest person with a fortune of over $54 billion (Rs 3.83 lakh crore).
While the elder brother became Asia's richest person followed by a place in the coveted list of world's top 10 wealthiest persons, the younger Ambani was forced to stand in Supreme Court a week ago for not paying dues of Rs 571 crore, a paltry amount by Ambanis' standards, to telecom equipment maker Ericsson by RCom. Once his crown jewel, the telecom giant is facing insolvency proceedings at NCLT.
In the past, people used to refer to Tata and Birla while talking about wealth. Ambanis joined this elite wealth club thanks to the rags-to-riches story of Dhirubhai Ambani. With his wealth getting evaporated with every passing day now, Anil Ambani is no longer a part of this elite club. That’s sad indeed.
However, Anil would have been in safe zone had he refused to cancel non-compete agreement with his big brother. Like Kara Mustafa 400 years ago, he committed a strategic blunder and is now facing consequences. But as the consumers of mobile telephony, we should thank Anil Ambani for making the mistake. Otherwise we would not have been blessed with Jio which has revolutionised telecom sector in India and brought down telecom charges to rock bottom!