Recent Posts

71

Technology / Jio - IoT , SME and Cloud Services

« Last post by wiredlife on October 23, 2019, 11:23:17 AM »

Jio has mega plans for IoT

Pan-India 4G network for IoT to connect data from smart sensors in residential, industrial and public resources
Plans to capture ~50% of 2 bn connected IoT devices in 2 years
NBIoT opportunities could translate into Rs 200 bn/year revenue (Not in our assumptions)

Jio SME Cloud
JIOFIBER Fixed-Line Connectivity and Cloud Applications to have plug-and-play technology-enabled tools.
Jio has partnered with Microsoft to enhance the adoption of leading technologies (data analytics, AI, blockchain, IoT)
Partnership to use Jio connectivity for Microsoft’s solution like Azure, Azure AI and Office 365

72

FTTH Broadband / Jio Fiber – to target Hathway/Den/BSNL Broadband Consumers

« Last post by wiredlife on October 23, 2019, 11:16:24 AM »

RJio plans to roll out Jio Fiber across 1,600 cities with target of ~20 mn residences and ~15 mn businesses through FTTH
(and not through cable). RJio’s plans seem aggressive, as total home broadband connections in
India stands at just 18.4 mn till date with only 0.16 mn net additions in last 2 years. Earlier, RJio’s management had agreed
that the last mile FTTH connectivity to homes will require hard work.

FTTH (fiber) penetration is low in India (only 1.2 mn connected homes) – an opportunity. An opportunity for RJio to rapidly
gain market share from:-
- 25 mn Hathway/Den homes
- 10 mn BSNL customers, who may switch for better services at attractive prices

RIL holds 72% stake in Hathway and 78.1% stake in Den Networks. Acquisitions were for (i) last mile connectivity of its GigaFiber and (ii) expediting customer acquisition for GigaFiber (gives access to 30k + LCOs and 24 mn homes in 750 cities). RJio plans to drive penetration in existing Den/Hathway connected homes through infrastructure upgrade, distribution and offering more services using their networks

73

4G / LTE / What is Jio thinking of Interconnect Usage Charges ?

« Last post by wiredlife on October 23, 2019, 10:36:50 AM »

R-Jio's net IC costs continue to decline at a rapid pace. 2Q saw a 23% qoq and 37% yoy decline to Rs6.55 bn. Assuming the trends on net IC movement (reflecting movement in off-net traffic imbalance) continued, R-Jio was looking at a maximum of another 4-5 quarters of being a net IC payer and a cumulative incremental net IC cost of not more than Rs20 bn even if TRAI defers the move to the BAK (bill-and-keep) regime.

In this light, it is surprising that R-Jio continues to term its move as one solely driven by TRAI coming out with fresh consultation on IUC. Having absorbed a cumulative net IC cost of Rs135 bn in the past 12-odd quarters, it is unclear why Jio could not have absorbed another Rs20 bn, worst case, in net IC cost over the next few quarters. Going by the trend, Jio is on course to become a net IC earner in the next few quarters and would have recovered this incremental burden even if the BAK-deferred was only for a period of 2 years.

To be sure, Jio is likely to benefit irrespective of the outcome of the recent consultation on IC.

74

FTTH Broadband / Jio FTTH and Home Automation services

« Last post by wiredlife on May 16, 2019, 10:29:00 AM »

Working on rolling out FTTH in 1600 cities and towns, earlier plan was 1100 cities. Same management of Hathway and Den will continue
Waiting for CCI approval before meaningfully start engaging with Den and Hathway

The tower business has ~0.7mn route km, being increased to ~ 1.1mn route km, of built and under-development fiber
Significant proportion is intra-city and underground
Average age of less than 3 years
Architectured for FTTx and future technologies (5G and beyond)
RJIO has contracted for 50% fiber pair
Other than telcos, ISPs, BPO, large enterprise etc. can be customers of the fiber

Jio Smart Home Services
-Voice Assistant Control your home via voice command
-One stop control of all lighting, curtains, AC & appliances
-Monitor visitors and Secure your loved ones from anywhere
-Monitor elders & kids from anywhere
-Proactive notification of home safety

75

3G / HSPA / EVDO / 3G/4G subscriber additions normalise MoM

« Last post by wiredlife on May 16, 2019, 10:24:25 AM »

After rising sharply to 21m in Jan-19, the sector's 3G/4G subscriber additions normalised to 10m, taking the 3G/4G subscriber base to 532m. 3G/4G subscribers now form 45% of reported industry mobile subscriber base.

Of the 10m additions, we estimate that c.5m additions were from smartphone users and remaining were JioPhone additions.

The reported 3G/4G additions were led by Jio at 8m and Bharti Airtel at 2m. Vodafone Idea added 0.4m 3G/4G subscribers in Feb-19.

Over the past year, Bharti's push on bundled plans is helping the operator gain 3ppt share in 3G/4G smartphone subscribers to 24%.

With India mobile a three-player oligopoly and imminent recovery in sector revenues driven by stability in tariffs and rising data adoption, we remain positive on Jio which will emerge as a leading telco in 2019 and also Bharti, given its strong market-share defence and inevitable turn in revenues

76

5G / Wi-Fi / Vodafone Idea Strategies to drive ARPU

« Last post by wiredlife on May 15, 2019, 06:48:04 PM »

For driving up ARPU, company has initiated several measures. (a) Minimum ARPU plans of Rs35 (despite leading to loss of customers having
ARPU of Rs0-10). (b) Introduced plans of Rs119 offering unlimited voice along with 1GB/month, enticing users to smartphone data consumption. (c) Continued content partnership to drive adoption of higher ARPU plans. (d) In line with Bharti Airtel’s decision to remove Rs299 postpaid plan, VIL has also indicated they may consider the same but may do it on staggered manner.

While the management clarified that it will be difficult to realize synergy benefits beyond the initial guidance of Rs84 bn, there are several additional cost control measures they can target. These would be looked at in due course. Focus at this point remains delivery of targeted merger cost synergies.

77

3G / HSPA / EVDO / Vodafone Idea Network Integration + Infrastructure

« Last post by wiredlife on May 15, 2019, 06:46:44 PM »

Network integration continues at a swift pace and has been done in 10 circles – West Bengal, Andhra Pradesh, Haryana, Madhya
Pradesh, Himachal Pradesh, Assam, North East, J&K, Bihar and Punjab along with part of the Delhi circle. Network capacity in these circles has increased 34% qoq post integration.

The company is seeing higher data traffic growth in these circles which is driving higher revenue growth. The company has already removed surplus equipment on 24,000 sites out of the total 67,000 co-located sites and has also exited 9,900 low utilization sites.
They expect capacity to increase further by 30% in the next quarter. To augment capacity, the company has added 8,915 4G TDD sites during the quarter and have also deployed massive MIMO on around 2,000 sites in select locations.

Company is executing its network investments by planning at a district level and prioritizing regions, which have higher revenue potential and superior current competition positioning of VIL. They have also deployed massive MIMO on around 2,000 sites in key locations. Their current 4G population coverage reaches 65% compared to less than 50% in August. The company seeks 4G coverage for 1 bn pop by end-FY2020.

78

SmartPhones & Apps / How Jio Phones are Sold Using Reliance Retail ?

« Last post by wiredlife on April 02, 2019, 12:54:45 PM »

Reliance Retail purchases JioPhone, feature phone device, from OEMs and sells it to a third-party leasing entity at modest levels of EBITDA margins. JioPhone is then leased back by Reliance Retail from the third-party entity at a quarterly rental cost for a period of three years and provided to the customers subscribing for JioPhone services.

Reliance Retail had earlier indicated it plans to recover the rental cost over the life of a device through (1) margins (~2%) on related Jio recharges, (2) app-hosting charges on Kai-OS, which is the operating system used in JioPhone and owned by Reliance Retail, (3) revenues from advertisements on JioPhone and (4) other income on interest-free security deposit provided by the customer.

OPC Asset Solutions is the entity securitizing rent receivables from Reliance Retail for leasing of devices. It has raised Rs 120 bn in May-December 2018 from pass-through certificates (PTCs) under three trusts—(1) Rainbow Device Trust, Rs 15 bn @ 8.26% in May 2018, (2) Rent-A-Device Trust, Rs55 bn @ 9.25% in July 2018 and (3) Reliable Devices Trust, Rs50 bn @ 9.71% in December 2018. These PTCs are backed by over Rs130 bn of rent receivable against devices leased to Reliance Retail and the cumulative quarterly installment stands at Rs 11.5 bn now.

79

4G / LTE / Vodafone Idea - Ramp Up 4G Network

« Last post by wiredlife on February 15, 2019, 04:40:42 PM »

Vodafone Idea is ramping up 4G network and subscribers. Vodafone Idea added 11,123 4G sites in 3QFY19, including 9,066 sites on TDD and 4G network’s population coverage has improved to ~60% (from 40-50%) and is targeting 95% by March-20. This helped it register 13% QoQ rise in 4G subscriber additions to 9.5m in 3QFY19, but 4G penetration is still low at 19% of 387m subscribers.

Management highlighted that Vodafone Idea extended the minimum Arpu plan (which makes recharge of Rs35/month necessary to keep numbers active) on a staggered basis to all circles. This resulted in 35m subscriber disconnections in 3QFY19 to total 387m and we factor another 22m decline in 4QFY19.

80

4G / LTE / Jio Subscriber Base at 280 Million - No Price Cut

« Last post by wiredlife on January 22, 2019, 01:15:57 PM »

Jio has 280m subscribers, we estimate that c.65m are likely on JioPhones. Assuming an Arpu of Rs137 for smartphone users, the average Arpu of its JioPhone user could be Rs102, which is 11% higher than sector Arpus, implying that high-Arpu feature-phone subscribers are taking up JioPhones. This could be the reason for decline in Arpus that Bharti Airtel/Vodafone Idea have seen in B & C circles.

Jio management highlighted that it does not see any reason to cut tariffs given the strong ramp up in market share it has seen. We see this as a positive for the sector, as stability in tariffs over the past two quarters and adoption of bundled data plans have already resulted in stable sector revenues and in fact 3-16% growth in revenues of metro and A-circles (53% of sector revenues).