In order to enhance competitiveness and productivity, Reliance Communications Ltd. has gone for organisational change on Wednesday. The company has replaced Syed Safawi with Shamik Das, chief operating officer of its wireless business to head the division.
The company has not renewed Syed Safawi’s contact contract as the president of the company's largest arm.
"The primary objective of the reorganization is to enhance market competitiveness, execution excellence and improve productivity and quality of service in the field," the company said.
The flagship company of the Reliance Group, headed by billionaire Anil Ambani, is merging its three geographical units with all heads reporting to Das, who is also a joint president in the company, Reliance Communications said in a statement. Das joined India's second-largest mobile phone company last November from smaller peer S Tel Pvt. Ltd. where he was the chief executive officer.
The move is in line with a company announcement last September that a chief operating officer will run its wireless business instead of the structure of three regional heads, as Reliance Communications reorganized operations to enhance competitiveness in India's fast-growing and fiercely competitive telephony market.
The new structure will enable a "leaner and flatter" organization, strengthening its customer facing activities such as sales, distribution and customer service, it added. Analysts say the move is designed to save costs.
Reliance Communications' performance has been under pressure due to intense competition--which kept call charges very low--and high interest costs on the debt it took in 2010 to buy bandwidth and expand network. It has been trying to sell stakes in itself and some of its units to raise funds to repay debt of over $6 billion but hasn't been successful.
Apart from operational pressures, the group came under a cloud when one of Reliance Communications' units, Reliance Telecom Ltd., along with some of its executives, were charged with having benefited from so-called irregularities in the grant of telecom licenses and bandwidth in 2007-08. Reliance Telecom and its three executives are under trial and have pleaded not guilty.