To compete effectively, we assume Jio's cost/MB will need to approach or surpass the incumbents. We expect Jio?s cost/MB to reach Rs0.07 by FY18, a level comparable to the incumbents. Our estimates suggest Jio will need to generate an overall throughput of 2,600bn MB on its network.
The mobile business will not provide Jio with the requisite data throughput relative to its investments. The Household segment (IPTV and home broadband) will provide the scale to achieve a competitive cost position on mobile data.
We believe Jio?s ambition is not restricted to the Indian mobile market ? rather it encompasses the home market which includes broadband, IPTV and a host of digital services. The Indian household sector with 244m households remains an underserved market. India has only 19m fixed internet connections.
