Should Reliance Jio’s Voice Strategies Consider MVNO Possibility?

Reliance JIO Infocomm Logo_bigThough many of our impatient readers are skeptical about Reliance Jio’s commercial launch of 4G services, let me tell you guys one thing, the services will be so fast that you will never be impatient. What I believe by seeing the progress of laying OFC across Kolkata, Jio may go for launch at several cities at one-go in next 90 days and there is little chance that they start offering voice during initial launch.

Spectrum on 2.3Ghz for data-only to be used for lte-tdd services while role of recently acquired 1.8Ghz spectrum in 14 circles is yet to be confirmed. In most probable situation Jio will use 1.8Mhz band for more bandwidth in selected pockets along with WiFi and FTTx. Jio can wait and go for carrier aggregation for lte-advanced solution.

At this point VoLTE is not mainstream, and thus Jio can not directly enter into voice market. Other 4G operator in country, Airtel is offering 4G voice using circuit switch fallback mechanism.

Data-only approach is not a good idea as telecom market of India still earns majority of revenue from voice services , and Jio may jump into MVNO (Mobile Virtual Network Operator) way to piggyback over an existing mobile operator to be the game changer and a real threat to existing voice and data service providers incl. incumbents. [ MVNO = A mobile operator which has no network, no spectrum but buys a wholesale data, voice or text from an existing operator and sells to end customers generally at a very low cost with their own billing system.]

MVNO policy in India was not in a proper shape and Tata Tele made two deals with Virgin Mobile and Future Group, but those services were actually under brand sharing agreements. Talk24, the venture between Future Group and Tata Tele is mere like a loyality program of Future Group to cater its larger retail customer base.

Virgin Mobile with its catchy advertisements and schemes like ‘get paid for incoming calls’ made an impact in the market but fails to sustain for some reasons:

1. They chose cdma platform without proper internet sevices for mobile users. So when data habit was growing among young population VMI could not take care of it. Later GSM of VMI was launched but had almost no impact in market.
2. Dongle services were costlier compared to other players (funnily MVNOs in other countries offer the cheapest tariff)
3. Tata owned a part of it hence TTSL could not make it cheapest as it will compete against TATA Docomo.
4. In 2008 the telecom market was watching terrific competition and MVNOs can not make an impact in a low-cost tariff environment.
5. Virgin Mobile India is now totally owned by TTSL but no 3G services still now.

However new government at place and we can expect a proper MVNO policy as the days of ‘bleed and let bleed’ (=hypercompetition) is over and power to incumbents is back. Country’s largest private company Reliance Industries’ greenfield telecom arm can leverage the proper MVNO policy in time. Jio can use other mobile operator’s network on pan India basis or in selected circles to offer 2G voice services. We can expect brotherhood would go stronger to slaughter incumbent players as Jio may choose Reliance Communications’ 2G network. I can’t predict which 2G technology – GSM or CDMA Jio would go for but everyone knows about Mukesh Ambani’s love for CDMA.

RCom will have to renew its cdma spectrum (800 mhz) in few years but I don’t think Jio may consider to go for it. New government’s policy for spectrum sharing and spectrum buy or sell will also change the game as Jio may look into spectrum sharing with RCom and probably with Videocon Telecom.

Oppositely Jio can also offer MVNO services for 4G services to smaller players like Uninor ( 2G voice + 4G data via Jio) or other MVNOs.

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18 Comments on "Should Reliance Jio’s Voice Strategies Consider MVNO Possibility?"

 

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Sunil Sarkar
June 18, 2014 11:21 pm 11:21 PM

No one cares about TD-LTE, there are few devices that support this Chinese-only protocol. The question is when an Indian operator will offer a 4G service conforming to global standards.

arvind
June 18, 2014 12:13 pm 12:13 PM

Atlast coming 2015

kavin
June 14, 2014 6:44 pm 6:44 PM
we are not impatient, we are rather irritated by telecom talk by talking about this useless 4g.. after years of hype on 3g, its not a sucess.. less than 5% areas are covered in past 4 years…no coverage in small towns.. most of operators consider 3g as dead investment.. look at price of voice.. its shooting,.. bcoz of 3g data 2g has risen double fold.. we pray no 4g.. its not angel its a devil where data price of 3g will shoot up.. now we end paying 1gb (3g) = rs. 150- 200..but look at 2g it was 1gb= rs.… Read more »
AcK
June 21, 2014 7:42 pm 7:42 PM

Don’t think there is any link between 3G and rising prices of 2G. With few operators closing shop, the existing large operators would have anyway revised 2G voice/data prices upwards. RIL 4G, if aggressive on pricing, has the potential to bring 2G/3G data prices down – pricing is always a function of competition in the market.

Tito
June 16, 2014 12:27 am 12:27 AM

HA HA HA !!

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