Reliance Jio to commercially launch operations in October: CLSA

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Jio may commercially launch 4G voice and high-speed data services ahead of festive season in October, even as the new 4G entrant has started to handle the second-highest data traffic among all telecom operators and could ramp up close to the highest even before launch, according to brokerage CLSA.


"Several indicators suggest a strong possibility of commercial launch of Jio's services within the next three months ahead of festive season in Octobre," CLSA said, adding that Jio’s network can easily handle usage of 5 GB per month data each by over 100 million subscribers. Recent media reports however suggest that Jio may launch commercial services on August 15.

"This large capacity may form the core of Jio's strategy," the brokerage said in a note. “Using fourth quarter 2015-16 mobile data traffic (2G+3G) of incumbents, Jio's network may already be handling the second-highest data traffic," it said.

Reliance Jio recently extended its 3-month complementary service to non-LYF phone buyers of premium Samsung 4G phone models, and it may extend this offer to users of Apple as well as HP devices in the next few days.

A recent ET report said that the company has sent the data bundling proposal to almost all the smartphone vendors in the country, and may extend the preview offer to some Indian handset brands’ devices. Also, Jio is seen to kickstart its advertisement campaign soon as it has become the principal sponsor of India's Olympic contingent for the 17-day event starting August 5. "This along with the launch readiness indicated by the management in its post (Q1) results analyst meet suggests an imminent launch," CLSA added.

Jio recently said that it is serving to over 1.5 million subscribers that are using an average of 26 GB data a month. CLSA said that Jio's monthly data traffic is nearing 39 million GB. "Our tests reveal no notable drop in user experience despite major rise in data traffic, which points to Jio's large capacity," CLSA said. "Milking its large capacity will be the core to Jio's strategy of offering data at attractive unit pricing and still achieving high targeted average revenue per user (ARPU)."

The recent drop in entry-level price of LYF's 4G phones to sub-$ 45 and addition of subscribers beyond LYF phones may boost overall traffic and Jio the largest data network even before its commercial launch, CLSA predicted.

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