Reliance Jio Infocomm

Can Reliance Jio Launch 4G-LTE Data / Broadband at 50% Discount to Incumbents ?

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Reliance jio Infocomm Launch Data RatesIn our previous report we have analyzed the need for disruption by Reliance Jio Infocomm in the Indian Telecommunications space. Today we’d like to throw some light on what will likely happen to the Hottest Area of Telecom – Mobile Broadband / Data Services if Reliance Jio were to launch at 50% discount to incumbent players.

The current realization is 25-29 paise/MB for incumbents; this is not the most aggressive disruption assumption), it would mean R-Jio starts selling at 15 paise/MB. Current 3G usage in India (on a base of around 52 mn subs) is

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How Can Reliance Jio Disrupt Indian Mobile / Wireless Market ?

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We Probably have the highest coverage on Reliance Jio Infocomm in the public domain analyzing each and every move the company makes openly. In the absence of any clear road map being portrayed by the Ambani’s team to Public / Shareholders; we try to address three main issues on the Disruption in Indian Wireless by the launch of Reliance Jio Infocomm.

Does Reliance Jio intent to disrupt the Telecom space in India which is stabilizing after the 2G Spectrum Scam – The honest answer is

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Can Reliance Jio Create Accelerated Demand in Low 3G Market ?

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Empirical Evidence on Wireless Broadband adoption from across the World suggest that meaningful 3G penetration is a necessary condition for accelerated LTE adoption. Can a deep pocket player like Reliance Jio Infocomm overcome the challenges posed by low 3G penetration in India ? Can R-Jio create an offering / ecosystem to drive 4G adoption by 2G customers without the in-between 3G upgrade? Quite honestly, we do not know. However, we do believe that a price disruption centric strategy to achieve this will make any business case extremely challenging for Mukesh Ambani led Reliance.

Consider just the handset challenge

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Reliance Jio’s Massive Optical Fiber Network + 5 NationWide Data Centers

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Reliance Jio OFC NetworkIndustry Channel Checks are indicating that Reliance Jio Infocomm has quietly rolled out ~100,000 Rkm (route kilometer) of optic fibre cable, and the rollout continues at a fast clip. This is already comparable with fibre rolled out by the rest of the industry. Sources Indicate Reliance Jio already has the largest intra-city optic fibre network with 85,000+ km across 700-800 towns. This is a major differentiator for mobile backhaul in an industry with sub 10% fiber penetration into towers. Till date, Airtel Vodafone and Idea Cellular have used 12-24 fibre threads, while RJio is using mostly cables with 288 fibres (in some cases 96 fibres).

What if Reliance Communications & Reliance Jio OFC Networks Complement Each Other ?
Till now, RCom was believed to have the largest fibre network among private operators, with an intra-city network of ~70,000 Rkm [Once again laid under the direct project Management by

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How Many Towers Reliance Jio Requires for Launch ?

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Reliance Jio Infocomm LogoThe entry of Reliance Jio into the 4G space is expected to accelerate data growth / pickup for operators. The 4G LTE rollout has taken off with a very slow start. Empirical data suggests Operators will need more 3G towers vs. 2G towers because 3G is on higher spectrum (2100 MHz) and data networks are non-scalable. Importantly, data coverage shrinks as a result of increases in additional subscribers, i.e., additional data usage since the BTS has limited data capacity. Extending the same analogy, 4G spectrum is at 2300 MHz band, and one BTS has coverage of about 300-400 meters at this spectrum versus 1,000 meters at 900 MHz spectrum. Hence, the number of BTS required for providing seamless 4G LTE data coverage will be significantly higher.

Reliance Jio Infocomm would require

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Wireless Spectrum Sharing Negative for Reliance Jio

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Spectrum Sharing Impact on Reliance JioTRAI has released Spectrum Sharing guidelines for Wireless Operators in India. The recommendation to not permit spectrum leasing (at this stage) should be a dampener to challengers [New Entrants like Reliance Jio Infocomm, Uninor, etc] looking to monetize their underutilized spectrum holdings.

Spectrum sharing, as recommended by the TRAI, is unlikely to help challengers meaningfully. 2G ICR arrangements anyway have been around and help the challengers share networks from a coverage standpoint. Spectrum sharing, as highlighted earlier, is a capacity enhancing measure and hence, would aid capacity-constrained incumbents at the

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Reliance Jio Infocomm to build 4G WiFi services across Hyderabad & Telangana

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Hyderabad Wi-Fi 4G ServicesReliance Jio Infocomm’s ambitious Telecom venture got a shot in the arm today as the company has completed rolling out 500 Km of optic fibre cable in Hyderabad alone and remaining 1,200 Km will be done soon. Reliance Jio will be the biggest competitor for Beam Telecom Which has one of the best FTTH Broadband Service in Hyderabad.

Reliance Jio has earmarked a massive Rs 4,100 Crore [$ 700 Mn] investment to build 4G WiFi services across Telangana which includes the City of Hyderabad, six other municipal corporations and 37 municipalities across the state in the first phase and expects to cover the rest

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Network Experiments of Reliance Jio Engineers for VoLTE / 4G

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Only 8 out of 300 networks across the world currently provide VoLTE. As VoLTE is in its early days it will be complex, expensive and difficult, and as such, it may be more feasible to look at options via the circuit switch fall-back (CSFB) route. Reliance Jio can provide voice under the CSFB route. There have been limited deployments so far. Only the South Korean telecom market is an exception with VoLTE being widely used because of the availability of fibre across all towers, superior in-building coverage, and significantly higher consumer spending on telcos. Most operators are sticking to the Circuit Switched Fall back ( CSFB) option only as of now for VoLTE.

VoLTE Production in 2300MHz and 1800Mhz
VoLTE offers no obvious benefits except some minor

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Reliance JIo LTE – A Serious Threat to Reliance / MTS / Tata Photon EVDO Broadband

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Reliance Jio to Compete with EVDO BroadbandReliance Jio Infocomm‘s 4G LTE and FTTH is a serious threat to hi-speed EVDO based broadband dongles as a natural initial market. The dongle business marries well with the expected USP of Reliance Jio’s service offering – speed. High average usage on dongles (we estimate usage of around 1.5-1.8 GB/month/sub across the estimated EVDO dongle subs base of 8-9 mn in the country), low customer expectations on seamless coverage (versus handset customers), and no need for voice capabilities makes dongles a natural market for Jio to focus on.

EVDO Broadband offerings from Reliance NetConnect, Tata Photon and MTS MBlaze have a lion’s share of the dongle market

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Will RCom Open the 2G Voice /CDMA Channel to Reliance Jio ?

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Reliance Communications (RCom) has already entered into three infrastructure sharing deals with Reliance Jio Infocomm – Inter-city optic fibre for Rs12 bn on-time payment, Tower sharing for Rs120 bn over the tenure of the agreement and Intra-city optic fibre for unspecified amount.

Till the time Reliance Jio’s own network coverage is wide enough, it is possible that RJio makes use of RCom’s network for voice in areas where its LTE network is yet to reach. In our analysis, such a deal

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