5 reasons why RJio fear looms large over incumbents

Remember the Reliance group’s ‘Monsoon Hungama’ of 2003, when the new offering took the telecom industry by storm as it offered multimedia mobile phones for a down payment of Rs 500, with three monthly plan options— Budget 149, Budget 249 and Dhirubhai Ambani Pioneer Offer.

mobile-india-broadband

The offering led to a revolution in the telecom sector and as a result, millions were added to the country’s subscriber base. Now, once again it’s the Reliance Industries telecom arm Reliance Jio, which is hogging the limelight with its plans to launch 4G services in the country by next year, and the market is eager to see that whether it would able to create the same frenzy of ‘Monsoon Hungama’ this time too. Well, only time will tell that!

Meanwhile, the incumbents such as Bharti Airtel, Vodafone are putting on a brave face as they invest heavily to upgrade their networks, launch 4G services aggressively and say that they are prepared to compete with their formidable rival. But certain facts could not be ignored which help Reliance Jio to get an upper hand over the incumbent players.

Here take a look.

1. Reliance Jio is most likely to lure the heavy data users of Bharti Airtel, Vodafone through high speeds and high cap on data downloads. Analysts believe that RJio has credible options to build the LTE ecosystem in India and coverage quality and voice services concerns could be addressed by carrier aggregation and VoLTE. Reliance Jio can support five times more data from its 4G site compared to a 3G site of Bharti or Idea. However, the incumbents seem less prepared with their poor LTE ecosystem, an Edelweiss report says.

2. Initially, the company is expected to cover 80% of the population in the country and moving ahead it would target 100% population in the next three years. At the same time, Bharti’s network covers 86.7% of the population currently. Besides, RJio is also rolling out high speed internet services via FTTx in over 900 cities/towns which will enable the telco to offer a wide gamut of digital services across various sectors. Bharti Airtel recently announced its plans to deploy FTTH network; however, it did not mention any specific rollout plan.

3. Those who thought voice services could be a challenge for RJio, on 4G services, it is looking to provide advanced voice calling service using voice over LTE (VoLTE) technology and the company has already showcased the technology successfully with China Mobile in Barcelona. Going by reports, Jio lab tests and trials have been successful and they have not faced any problems in interconnect of VoLTE calls with 2G/3G networks.

4. Analysts expect that Rjio will offer 2.5-3GB data at Rs 250-300 price points and for incumbents to offer the same price points would be a bit difficult, keeping in mind their large capex, debts, among others. Reliance could be targeting ARPU between Rs 300-500 versus Rs 237 of incumbents, the Edelweiss report says.

5. Coming to distribution strategy, under its ‘LYF’ brand, Reliance Retail will offer affordable 4G LTE smartphones. It has over 1,000 Jio centers across the country and its distribution network will include 0.5 million connectivity outlets and 1 million additional recharge outlets at launch. Besides, the company is aggressively tying up with smartphone brands, chipset manufacturers and OEMs and it is also working on pocket router solution in a bid to connect with any 2G/3G smartphone to 4G services network.

Having over six years of experience in business journalism, Krishna has a knack for writing on telecom and IT. She believes that tryst with technology is the best thing that has ever happened to the mankind. Krishna is a telecom analyst with CMR

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Krishna RyaliKiran FernandesVipinMADHAN KUMARGola-Barood Recent comment authors
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mike
mike

if relianc joi offer 1GB .4G Data at Rs.60 .then.Other operatars have to shut down there 2G and3G

Kiran Fernandes
Kiran Fernandes

They are gonna start at something like 10GB for 60 to 80rs or something. And yes. A lot of operators are gonna lose customers because of Jio.

Gola-Barood
Gola-Barood

How go you knoww?

Kiran Fernandes
Kiran Fernandes

Because Jio is focusing mainly on data. They didnt bother so much about voice. And, thats just my guess.

Elisa and DNA in Finland provide unlimited 4g at 16 euros a month which comes to rupees 1200 a month. And they don’t have any data cap. You can google it.

Gola
Gola

Can We use Reliance Jio on RCom’s 2g/3g network?

Kiran Fernandes
Kiran Fernandes

Nope. Jio will be a 4g only operator.

G-O-L-A
G-O-L-A

Why not?
So, As far as I know Jio’s coverage is limited (At Least for now)..
What if I go to a village.. Will Jio connect to other operators.. Like AVOID or BSNL? I am a marketer and I have to go to several places.
Excuse me for my english. But please clarify.. 🙂

Kuntal
Kuntal

I don’t think rcom has the coverage where jio dosenot.

Maghsood
Maghsood

After 700 mhz band auction on March,coverage is not a matter to Jio.

Jyotirmoy Manna
Jyotirmoy Manna

Low support in handset range in this band.

Kiran Fernandes
Kiran Fernandes

because Jio is a 4g only operator, they are trying their best to get coverage in every nook and corner of India. If you see any digging of roads around, you will notice that some people are setting up cables. Those might probably be the Jio guys. there is extensive cable laying and tower setup all over India. Solid work is going on in Goa for setting up the network. And, by the time they launch, they will cover 90% of every state. And very soon, they will start providing ftth to all the people in the country. So less… Read more »

Maghsood
Maghsood

They will use both 700&850.most of the 4g handsets support either one.

Jyotirmoy Manna
Jyotirmoy Manna

700 and 850 or 800, what should we say ?

Kiran Fernandes
Kiran Fernandes

Moto x play(Dual sim) which is available on flipkart(20k) has support for 700(28) 800(20) 850(5) 1800(3) and 2300(40). the lyf phones which will be coming will have support for all the bands(just my guess).

Vipin
Vipin

Yes. Moto X Play support all current & future bands to be used for LTE in India. But one bad news is that it will not support VoLTE. According to Moto Customer Care : ” Device will not support VoLTE. This option is not available in this particular series of the phone.”

Bad move by Moto

Abhi
Abhi

Yes you can use for both the network

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