Reliance Jio Infocomm has delayed launch of its services from 1HCY15 to 2HCY15, which some investors may believe is due to technology/strategy issues. Not true. RJio is planning to launch services in 900 towns initially (as per its annual report). RJio envisages a pan-India presence in the course of time. Notably, a very low proportion of towers in India are linked through fiber in India and data transfer speeds/quality is constrained by microwave communication.
RJio needs to lay large amounts of fiber before launching services. To get municipality approvals in 900 cities/towns and laying fiber across the cities is a time-consuming exercise. Particularly, the time taken to get the approvals/permits to lay fiber can be unpredictable, which is likely the primary reason for delay in the launch of services. Premature entry resulting in sub-par data services could cause wide-spread negative word-of-mouth undermining RJio?s ability to attract subscribers. Hence, we do not think that the delays in RJio?s launch of services are due to any technical issues/glitches or sub-par experience.
