December blockbuster ; The Ambani brothers love to make announcements around their father's birth anniversary on December 28. This year, while Mukesh started off the Reliance Petroleum refinery on December 25, Anil announced the GSM launch on December 30.

After some dithering, Reliance Industries' subsidiary ReliancePetroleum announced the commissioning of its new greenfield refineryat Jamnagar on December 25, meeting the yearend target it had setfor itself in 2008. The announcement came after initial reports thatthe commissioning might happen only in March 2009.The move wasperfectly timed with Dhirubhai Ambani's birth anniversary onDecember 28. But it was tokenism more than anything else. For itwill take months to get the plant fully running. Only the crude unithas been activated. The Reliance Petroleum press release said thatthe rest of the secondary units are being synchronised andcommissioned. While officials at Reliance Industries refused to comeout with a definite date by which all the units will be functioning,sources indicated that it may take a while. In fact, sources saidthecrude unit itself will take sometime to stabilise and it will bewell into January before processing starts.Meanwhile, with twoReliance refineries at Jamnagar, this little town in Gujarat isalready being labelled as the refining hub of the world. Essar'srefinery is also located in the same place. The capacity of the newReliance Petroleum refinery is 5.8 lakh barrels per day and is thesixthlargest in the world. It includes a 0.9 MTPA polypropyleneplant and has been built at a cost of $6 billion. The Reliance groupnow accounts for 2 per cent of the world's total refiningcapacity.The new refinery, however, comes on stream at probably themost difficult quarter for the group. Standard&Poor's (S & P's)changed its outlook on the company to negative from stable. S & P'scredit analyst Mehul Sukkawala said:Profitability is expected to beadversely affected by lower fuel demand, especially in developedmarkets.In a report, S & P has pointed out that the company willface adverse market conditions immediately, but its cash flows mayimprove once the new refinery starts full-scale operations.The otherissue that will worry Reliance Petroleum is the narrowing differencebetween the prices of sweet crude and the high-sulphur heavy crude.The company's ability to process the cheaper, heavier crude allowedit to enjoy a higher refining margin in the past. However, withrefiners globally adopting the technology to process heavy crude,the price differential between the two has already decreased to$1.20 a barrel, from as high as $10 a barrel in 2004. The newJamnagar refinery coming on stream has further buoyed the market forheavy sour crude. The output from Indian refineries fell by 1.1 percent in November 2008 an indicator of the adverse market conditions.Reliance Industries' refinery output, too, has fallen. Clearly, allis not well for Reliance and 2009 could be a challenging year forthe group.

Testing times& bull; New refinery is world's sixth-largest withcapacity of 5.8 lakh barrels per day& bull; However, RIL's grossrefining margins dropped by $2 in the September '08 quarter comparedto the average for 2007-08& bull; S & P feels refining margins woulddecline further by $3 to $4& bull; S & P revised outlook from stableto negative due to company's increased debtRinging in GSM& bull; Rs10,000 crore of investments almost committed& bull; Will reach11,000 towns and scale up to 24,000 soon& bull; Launch used existingtowers of Reliance Infratel (set up for the CDMA business)& bull;Infratel also offering network for other new licensees& bull;Aggressive plans for nationwide 3G services On Tuesday, December 30,Anil Ambani announced the nationwide roll-out of GSM services byReliance Communications (RCom). It was yet another importantmilestone for the Anil Ambani-promoted company. While it offers CDMAservices across the country, its subsidiary Reliance Telecomcurrently offers GSM telephony services in only three circles: WestBengal, Assam and Gujarat. Now, the junior Ambani intends to use itsGSM network to catch up with market leader Bharti Airtel and keepother rivals like Vodafone at bay. GSM services, after all, accountfor about 75 per cent of India's 325 million mobile users.Initially,Reliance Communications will cover 11,000 towns and 3,40,000villages with its GSM operations. It has completed most of thecapital spending on the second network and has already spent Rs10,000 crore ($2.1 billion). At a press conference in RelianceCentre in Mumbai, Ambani said:With the combined offering of GSM andCDMA we will be aiming to become India's #1 network and serve onebillion Indians.Ambani also announced that Reliance Communicationswill be bidding for 3G spectrum on both GSM and CDMA platforms andwould want to be a nationwide operator for both.Angel Broking'sanalyst Harit Shah feels the entry of Reliance in GSM services isonly good news for subscribers.Competition always helps,he says. Thebrokerage has put a buy on this scrip with a target price of Rs450.For Anil Ambani himself, things have come full circle. In 1997,Reliance Telecom, the initial telecom venture by the unifiedReliance group, began operations on the GSM platform under thestewardship of Anil Ambani himself. Later, in 2000, Mukesh Ambanitook over the mantle of Reliance Communications and preferred CDMAit was then known as the poor man's mobile service with limitedmobility. Subsequently, Anil took a backseat in the telecom businessuntil the Reliance empire was carved up between the brothers. Andtoday, he has led the business back to GSM technology.The tariffplans announced on January 4 for the GSM foray attempt to outdo thepopular 501 scheme (Monsoon Hungama) that the company had offeredunder his brother Mukesh's leadership. The GSM customers have beenoffered SIM card for as little as Rs 25. A plan called customerexperience programme has been launched that allows Rs 900 worth oftalk time to the customer for free over 90 days at Rs 10 per day.The plan promises almost 100 per cent freebies for any customerwilling to spend Rs 300 a month. It also comes with free unlimitedcalling at night within the Reliance Network and free unlimitedcalls for Mumbai customers within their state and Goa. Many of theseare 'first of its kind in India' plans. One will just need to waitand see how competitors and consumers respond.