With Jio looking to use RCOM's 800 MHz (as per media), we expect increased competitive intensity post Jio?s launch ? now likely to be in Mar-16 vs. the earlier expectation of Dec-15. However, we do not expect an irrational price war, as we note that Jio already has invested US$16bn in its telco venture and may invest a bit more before its investment phase is over.
With such a large investment, we think that Jio would be unlikely to disrupt the market, as it could impact its own ability to generate returns on its investment. Hence, although we expect heightened competitive intensity post Jio?s launch.
An irrational price war would lead to a material slowdown in industry revenue that may impact even Jio?s ability to generate ROI. Over the medium term, we find Airtel to be one of the better placed telcos to gain traction in the 4G market, given its better 4G footprint and first-mover advantage.
