After hearing about Gautam Adani’s 5G plan, Mukesh Ambani found himself in a pickle: report.

After hearing about Gautam Adani’s 5G plan, Mukesh Ambani found himself in a pickle: report.

The two wealthiest men in Asia have peacefully expanded their spheres for more than 20 years, but they now progressively share the same territory.

Additionally, the two billionaires’ interests in green energy are very similar (File)

Billionaire Mukesh Ambani and his advisors ran into an unexpected issue in June while deciding where to direct the dealmaking lens of his organisation moving forward.

People with knowledge of the situation claim that Reliance Industries Ltd., owned by Mukesh Ambani, was considering buying a foreign telecom giant when word got out that Gautam Adani, who had recently surpassed Ambani as Asia’s richest man, intended to compete in the country’s first significant 5G airwave sale.

Ambani’s Reliance While Jio Infocomm Ltd. is the key player in India’s mobile market, the Adani Group is not authorised to offer cellular telecommunications services. However, the tycoon’s staff was placed on high alert, according to the sources, who asked to remain anonymous because they were talking private information, by the very possibility that he might be circling land that is so crucial to Ambani’s objectives.

One group of advisers suggested Ambani pursue the international goal and expand outside of the Indian market, according to those participating in the conversations. Another group, on the other hand, recommended saving money to avoid any rivalry at home.

Ambani, who has a net worth of $87 billion, eventually came to the conclusion that it would be wiser to keep financial reserves in case he faced competition from Adani, whose net worth increased to $115 billion this year, surpassing that of everyone else in the world, according to data from the Bloomberg Billionaires Index.

Asia’s two wealthiest men, who have quietly expanded in their separate spheres for more than 20 years, are now increasingly sharing the same territory as Adani, pushing his ambitions outside his specific regions of specialisation.

As India’s $3.2 trillion economy embraces the digital era, it is setting the stage for a conflict with far-reaching implications that will affect the country and the world. This will result in a race for wealth outside the commodity-driven industries where Ambani and Adani made their initial fortunes. The opportunities opening up — from data streaming and storage to e-commerce — are similar to those that accompanied the US’s economic boom in the 19th century, which sparked the creation of billionaire dynasties like Carnegie, Vanderbilt, and Rockefeller families.

The two Indian families are both equally hungry for expansion, according to Arun Kejriwal, founder of Mumbai-based investment advisory firm KRIS, who has been watching the Indian market and the two billionaires for 20 years. This suggests that the two dynasties will definitely come into contact.

He declared, “Ambanis and Adanis will collaborate, coexist, and compete.” “And finally, survival of the fittest.”

Adani and Ambani company representatives declined to comment for this report.

The Adani Group stated in a statement released to the public on July 9 that it has no plans to compete with Ambani in the consumer mobile market and will only use any airwaves acquired through the government auction to develop “private network solutions” and to improve security at its ports and airports.

Despite such remarks, there is much talk about him perhaps branching out into consumer wireless services in the future.

“I don’t underestimate a calculated entry by Adani into the consumer mobile space later to compete with Reliance Jio, if not now,” said Sankaran Manikutty, a former professor at the Indian Institute of Management in Ahmedabad who is still a visiting faculty member there and has worked extensively on family businesses, telecommunications, and strategy in emerging economies.

For many years, Adani’s business was concentrated in industries like ports, coal mining, and shipping, which Ambani avoided due to its significant oil investments. But that has drastically changed during the last 12 months.

According to Bloomberg News, the Adani Group was rumoured to be looking into new Saudi Arabian partnerships in March, including the possibility of investing in the country’s massive oil producer Aramco. A few months earlier, Reliance, which still derives most of its income from activities involving crude oil, abandoned plans to sell Aramco a 20% stake in its energy division, putting an end to a deal that had been in the works for two years.

The two billionaires’ interests in green energy also overlap significantly; each has committed to investing more than $70 billion in a sector closely related to the aims of Prime Minister Narendra Modi’s administration. Adani has started to hint at significant ambitions in media, sports, petrochemicals, retail, and digital services.

Reliance, owned by Ambani, either already rules these industries or has ambitious intentions.

Given that three private businesses now dominate India’s wireless market, history suggests that if Adani does begin to focus heavily on customers, prices may fall during the initial period of competition but then increase again if the two companies establish a duopoly. Consumer expenses decreased overall due to Ambani’s brave move to offer free calls and extremely cheap data when he first entered the telecom industry in 2016. Still, they are now rising once more as he solidifies his hold.

The two males appear to be very different at first glance. Adani, 60, is a self-made businessman, while Ambani, 65, received Reliance from his father.

But there are some striking parallels as well. Both men are notoriously media-shy and have a history of being intensely competitive, disrupting the majority of industries they enter and then controlling them. Analysts and executives who have dealt with them have a strong track record of completing large projects, are incredibly detail-oriented, and have outstanding project execution skills.

Both originate from Gujarat, Modi’s state, a western province. Additionally, they both closely matched their business plans to the priorities set by the prime minister for the country.

While Ambani has refrained from making significant investments abroad because of the uncertain global environment, Adani has accelerated his M&A expenditure. Not all of his deals involve Reliance. In July, the Israeli port of Haifa was purchased by Adani Group for $1.2 billion. In May, he paid $10.5 billion to acquire Holcim’s Indian cement operations.

Most of Adani’s recent ventures are still in their infancy, making it difficult to determine their actual impact.

However, economists concur that the two men will probably play a significant role in changing the Indian commercial environment, potentially giving control of increasingly large chunks of the economy to two families.

That might have significant repercussions in a country where income inequality only worsens as the pandemic progresses.

According to Indira Hirway, head of the Centre For Development Alternatives in Ahmedabad, while India’s present economic growth is comparable to America’s so-called Gilded Age in the 19th century, the South Asian nation is currently at risk of experiencing growing inequality.

If they cooperate, rapid diversification and overlaps between them “may lead to duopoly, which can affect the smaller enterprises in these industries,” Hirway warned. “If they begin to compete, it might change the balance of the commercial environment because both conglomerates would be vying for raw commodities and resources.”