Many (of our readers as well as other telecom minds) are in a shock, when Reliance Jio Infocomm joins hands with Bharti Infratel, the passive infra provider arm of Bharti Airtel which is considered to be the arch-rival of Reliance Industries on telecom landscape.
With the alliance in the infrastructure space between Bharti Airtel and Reliance Jio Infocomm it can be considered that Jio can not offer that dirt cheap tariff as Rs 10 per GB data.
In 2003 when Mukesh Ambani headed Reliance India Mobile launched its services, the competition was between a mere 50 paisa postcard and a mobile phone as Dhirubhai told. But this time, the re-entry of Mukesh can be explained best as how they can keep their promises to change the country’s digital landscape.
Jio at present has one main issue – that is to meet the roll out obligation and for that they have to fasten the OFC laying in all circles. That’s why they are partnering with multiple companies – in April Reliance Communications’ OFC network and Airtel’s i2i submarine cable network, in June RCom’s towers and now Bharti Infratel’s as well as Indus Towers’ tower and optic fiber networks.
But it does not mean Jio is going assest light mode, they are laying own OFC across all circles in a war-going foot. Not only that Jio had brought several foriegn operators to create their own submarine cable – Bay of Bengal gateway. Samsung is delivering the 4G LTE-TD BTS to Jio and less than 10% of total demand has been fulfilled.
To set up own towers Reliance has online submission forms over its website, where interested people, who are willing to share their properties for towers/FTTH can contact them to become a part of India’s biggest Greenfield telecom project.
So at present Jio is not thinking about the tariff, rather they are focusing on the roll out plan that will offer a seamless wireless connectivity over 2300MHz band using LTE-TD technology. Airtel’s 4G venture did not able to reach many potential customers, especially on tier II and III cities and concentrating in main metros did not work as there already are many alternative to 4G broadband.
Jio chooses the right path, as there is no use of quick launch with cheap tariff unless it is not available to the potential customers. And Jio does not want to be messed up.
With the economic crisis and India’s telecom sector has lost its growth momentum, Jio takes the logical decision. Credit Suisse has noted in its report, “If the agreement between Bharti and R-Jio is taken to the full logical conclusion, it could mean a more benign competitive environment across tariffs, vendor negotiations, and even spectrum auctions,”
At this current scenario, where Jio may launch services in another 6 months in atleast 20 cities of the country the tariff of Jio’s 4G data will be fixed and it is to be cheaper than all other options to smackdown the market.
This deal is also good for Airtel, as it gives revenue to Bharti Infratel. Secondly Airtel will have the access to Jio’s OFC and towers as the deal is two-way sharing. Even Airtel may offer pan India 4G roaming to its 4G customers in 8 circles over Jio’s pan-India network.