4G Battleground: Reliance Jio vs. Incumbents – Part II (Vodafone & Idea)

One thing that makes Sunil Sood worried is the spectrum scarcity and fragmentation. They are looking forward for spectrum sharing & trading, swapping, as well as mergers and acquisitions. If they are really tensed, they must be looking to Reliance Jio’s spectrum bank. Jio has spectrum over 3 bands, and all those bands are tech-neutral, and combining 3 bands can lead to launch of a faster LTE-Advanced network.

I think that Airtel, Vodafone, and Idea will cartel up their technology-neutral spectrum on 1800 MHz band to roll out 4G/LTE-FDD networks. Thus, they can avoid spectrum fragmentation as well as narrow band LTE roll out, and can bring wide-band LTE roll out in continuous channels. If their 3G ICRA is not illegal, then their 4G network sharing will not be a problem as government is initiating rules on spectrum sharing and trading. Airtel’s 4G offering is the biggest threat to both Vodafone and Idea as of now. Airtel is offering free 4G data, hassle free 4G activation on selected 4G smartphones, and Airtel has partnered with several handset makers including Xiaomi. Vodafone and Idea are offering cheaper 3G data to selected customers to match with other mobile data players like Reliance, Tata DoCoMo, and MTS who are offering data at a price which is almost Rs. 50-100 less per gigabyte, though officially they are sticking to high cost 3G plans.

Back in October last year, Idea Cellular just shrugged away the fear of upcoming 4G services. They were confident about their 3G network expansion and better 3G uptake among customers. However, in the past few months, people have become aware of 4G, thanks to Airtel’s promotion. Furthermore, smartphone makers are pouring ultra low-cost 4G smartphones in the market. Reliance Jio is also promoting its brand by offering free Wi-Fi in at least 8-10 cities in the country. In a recent report by LiveMint, apart from the battle on 4G turf regarding pricing and services, these operators will spend millions in brand promotion, i.e. advertisement war is coming.

Idea had plans to roll out 4G in 2017, but they took a reverse turn. The telco cited the reasons like rapid uptake of 4G devices, convergence between prices of 3G and 4G equipment, and increasing willingness of consumers. These key reasons pushed Idea’s 4G to be launched in Q1 of 2016, which is in line with Vodafone’s rollout plan. Idea will roll out 4G services in 10 circles initially. As of now, Airtel seems the only serious player on 4G among the three incumbents, and they are busy with LTE-TDD on 2.3 GHz band. Thanks to China Mobile’s successful launch, and Jio’s strategy to create own ecosystem, the 4G technology over 2300 MHz is seeing good growth in all the aspects. I believe that Airtel, Idea, and Vodafone will work together in rolling out 4G networks over FDD-LTE 1800 MHz, which accounts for nearly 40 percent marketshare globally, and has better ecosystem.