Reliance Jio likely to disrupt the status quo of telecom industry: Bernstein Research

In a move to capture more number of customers in shortest possible time and to reach in par with other telecom giants like Bharti Airtel and Vodafone, Reliance Jio may launch ‘disruptive offers’, according to Bernstein Research. The research titled ‘What is the Likely Impact of Reliance Jio’s Market Entry?,” predicts that Reliance Jio can earn a market share of nine percent over a period of 10 years through an organic strategy.

Reliance-jio

“Jio will be launching services with a new technology promising significantly faster data speeds than existing 3G services; one of the best spectrum holdings in the country and a supporting fibre optic transmission network to ensure long-term scalability,” analyzed the research.

Clayton M.Christensen, a Harvard Business School professor coined the word ‘disruptive technology’, who describes it as one that displaces something already well-established and shakes up the industry with products and services that create a completely new industry.

At the research perspective, the ‘disruptive offers’ that the research mentions is a way that the well-funded conglomerate adopt a strategy, wherein they offer more voice and data services at the same price as their competitors. This can heavily disrupt the status quo of the market.

A similar move was adopted by Hutchison ‘3’ while it launched 3G/data based strategy in Australia, Austria, Ireland, Italy and UK. ‘3’ was initially successful at its strategy, however held back by its inferior coverage and voice quality, observed Bernstein Research.

“Jio, like ‘3’ before it, is targeting to differentiate its services via superior data and an associated ecosystem of content. For data only subscribers – using laptops; tablets or wireless broadband, we expect the Jio experience to be impressive,” Bernstein said. ”Having spent $13 billion on building a network, Jio needs to get to scale in order to move to cash flow positive operations,” the report said.

“While any aggressive action is likely to impact all players, Bharti is well positioned with its own 4G spectrum to ‘match’ any offer. Vodafone may need to scramble to accelerate their 4G network deployments but should eventually be able to follow in the higher-value metro circles; although it is lacking in spectrum in the others,” it elucidated.

As a response, Bharti Airtel and Vodafone may accelerate their data propositions, deploying more 4G and matching Jio’s data pricing model while playing up their superior voice coverage and quality. In the long-run consolidation should result in a better market structure for the remaining scale players — Bharti, Vodafone and Jio.

“Whatsoever, customers seems to gain in the impending competition”, observed Bernstein.

Moreover, Bernstein feels that the customers are more likely to use Reliance Jio as a second ‘data’ SIM. “We are doubtful that Jio voice quality will be sufficient in circles where they are lacking in low-band spectrum; and doubt customers will abandon their existing voice providers.”

“Faster data priced appropriately and free voice offers would still be enticing to India audience, due to the data constrains in the nation,” it added.

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14 Comments on "Reliance Jio likely to disrupt the status quo of telecom industry: Bernstein Research"

 

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sanjit roy
May 18, 2015 2:16 am 2:16 AM
The fact is ril has made 2 greatest mistakes ever.1# Buying a bogus immature 2300 mhz band even they know that it has very poor coverage quality and ecosystem. Once the vodafone ceo has told that, we were right not to bid for 2300 mhz band, this statement which was given by vodafone ceo indicates that 2300 mhz band have no business case. 2# Then they did a another mistake not to participate in 800 mhz band spectrum auctions in march 2013, which was purchased by mts at cheap prices. This year ril bought it at high prices only for… Read more »
roshan sharma
May 17, 2015 7:00 pm 7:00 PM

One friend works in Bharti Infratel tower business and he said RJIO ghaasn kaat raha hai and everything is on rent and khud ka kucch bhi nahin hai
Soft launch between RJIO employees launched in jaipur few months back and there employees are using it in office
problem is in one corner of office its working blazingly fast and in other corner of office its not working and they have to correct this problem and have to install more towers

thats why launch is getting delayed their network is not perfect
Airtel launching 4g in jaipur in lesss than 6 months

Avijit Banerjee
May 17, 2015 9:53 pm 9:53 PM
First of all, Operator never cut grass. U re correct launching get delayed by RJIO. This is due to many parameters, operational problems for delay to start telecom services. All store, showroom of Operators are franchisee based business. The Corpus, Optical fiber infrastructure of Reliance or Tata Is huge. Dominant operators are unable to compete two in terms of money and infra. In soft launch of services by Operator in Circle, network, voice clarity & net speed problems are common. So overnight how do u expect Rel Jio few tower in Jaipur would increase. Rome cannot built-in a day or… Read more »
AVIJIT BANERJEE
May 17, 2015 12:28 pm 12:28 PM
To my opinion, the mob and data service – 4G when commercially launch by Reliance JIO will tell the market position in the presence of dominant players like Airtel, Vodafone. But at the same time old generation subscribers did not forget the revolutionary changes took place during Monsoon July 2003 in the lives of millions of Indians with handset and usage bundled offered by RCOM. I was also one of the lakhs who bought their services. Thereafter, calls rates were drastically reduced by competitors. So milestone of RCOM cannot be ruled out how pulled down the tariff since then. Who… Read more »
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