Five reasons why Vodafone and Idea can’t beat Reliance Jio

Jio, the digital telecommunications arm of Reliance Industries, has launched commercially as the LTE-supported SIM cards is available to select people. Interestingly incumbents – Vodafone and Idea – kept telling that 4G is not a threat to their business and that Jio can’t change India’s telecom sector.

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However, they have pushed their 4G rollout to a commercial level. These two incumbents did not buy any spectrum in 2010’s auction for BWA (Broadband Wireless Access) auction, and they are now banking upon their liberalized 1800MHz spectrum for LTE-FDD rollout.

Let me point out why Vodafone and Idea will be left behind by Jio.

1. Jio has the strongest fiber backbone

Jio has tied up with several companies to share their fiber for transmitting the 4G tariff off the towers. Jio itself has been rolling out its own fiber optic backbone which is estimated to be more than 1,00,000 kilo meters across India. Jio also has access to Reliance Communications’ fiber network, which was Mukesh Ambani’s brainwork, and it has the largest private OFC network. Apart from intra circle OFC network, Jio is part of two international submarine cable network – Bay of Bengal and AAE-I.

At the same time, Vodafone and Idea are depending on their microwave-based backhaul as they have negligible amount of fiber network under the ground. However, Vodafone knows this limitation and is in talks with YOU Telecom, which has fiber network in 12 circles. Idea Cellular is yet to concentrate on this part, but to beat Jio on 4G turf, they’ll have to look into this issue quite seriously.

2. Stronger Ecosystem of Jio

Reliance Industries placed Jio as a digital arm, not just another data service provider. While Airtel, Vodafone, and Idea launched 4G as next-generation data services. They are charging for 4G services similar to their 3G plans. Jio has an array of utility apps under its hoods including social networking app Jio Chat, cloud services app Jio Drive, music streaming services Jio Beat, video streaming services Jio Play, and so on.

Jio definitely is placed better than these incumbents who have not focused on these parts so far. Jio will have its own LYF series of 4G-supported smartphones, which are VoLTE and VoWIFI supported.

3. Jio has pan-India presence

Jio has pan-India presence while three incumbents lack such a huge presence. Airtel, Vodafone, and Idea may have it in a combined manner and taking intra-circle roaming, but their approach doesn’t seem enough compared to Jio’s spectrum bank, which floats across 2300MHz, 1800MHz, and 800MHz. By linking with Reliance Communications, Jio will have access to its and MTS India’s 800MHz spectrum once Reliance Communications acquires MTS.

4. Vodafone & Idea have limited spectrum

Vodafone and Idea will use 5MHz spectrum for their LTE-FDD rollout, while Jio has 20MHz for LTE-TDD rollout in all the circles and at least 5MHz for LTE-FDD rollout over 1800MHz and 800 MHz bands in selected circles. We doubt that Vodafone and Idea can have such as huge spectrum bank so as to beat Jio’s coverage.

Incidentally, Airtel has nine circles with 2300MHz band spectrum including 3 metros, Punjab, Haryana and Kerala has been better placed than Vodafone and Idea.

5. Jio has relatively cheaper tariffs

Reliance Jio is expected to come with reasonable pricing for its 4G LTE and related contents. While Airtel, Idea, and Vodafone offer 4G data at the existing price of 3G. They are not charging extra, but for mass adoption of 4G it needs disruptive pricing.

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74 Comments on "Five reasons why Vodafone and Idea can’t beat Reliance Jio"

 

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Biju
January 24, 2016 9:22 am 9:22 AM
All operators investing in market to retain their money with decent profitsi.e. Nobody is doing charity here… So can’t expect they simply sit n watch the game. They will also change the game plan accordingly to ensure their money back.. With this limited spectrum (5 MHz) other operators can also satisfy the present user behavior ( HD YouTube without buffering/ video calls in skype ….etc) Others already launched their N/W in major cities with strong back haul ( ensures good speed)where jio has weak presence(in site counts)..there lies the huge chunk of data users or high data revenue. Finally it… Read more »
pranav
January 23, 2016 10:11 pm 10:11 PM
Why all of us are talking like company brand ambassador? Even none of the owners are talking who is better? Even they are not worried? All of them have their cards to play in market & after all they have to kept company running after such huge investment. The fight will go state wise i.e in gujarat vodafone is best local player while in other state another company is there. On launch of JIO , customers will buy the handsets who are aware of technoogy n know how to operate i.e upper class people n Corporates… Now here the game… Read more »
Ayaz Khan
January 21, 2016 2:10 pm 2:10 PM

Vodafone is a good telecom company and good network in pan India bases

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