Even though Reliance Jio Infocomm (RJIO) has delayed the launch of its operations, the competition in the sector has not abated, with incumbent operators continuing the investments on network and in marketing of their 4G offerrings. With a view to gain as much share of the data growth, operators have upped the tempo on promotions and advertisements on both fronts -data and voice- resulting in lower realisations for both. The much anticipated RJIO launch is definitely weighing on the incumbents and has necessitated investments in network and spectrum thereby impacting cash flows which we believe could continue in the next couple of years
The other fallout of the competition and the need to protect their own turf, is leading to consolidation in the industry, be it the Reliance Communication (RCOM) and Sistema Shyam Teleservices (SSTL) merger or the recent Bharti Airtel's (Bharti) spectrum buy from Videocon Telecommunications (Videocon) in six circles.
