Reliance Jio Infocomm's biggest challenge arises from the spectrum bank it possesses currently. The company has 20MHz of 2300MHz on a pan-India basis and 5-7MHz of 1800MHz spectrum in 14 of the 22 service areas.
2300MHz is in a higher frequency band and suffers from poor propagation characteristics. Hence, a pan-India 4G network roll-out is
likely to be prohibitively expensive. Though 1800MHz is better than 2300MHz in terms of coverage, the company does not appear to have sufficient 1800MHz spectrum to offer a quality 4G service.
4G handsets are likely to sell at a significant premium to 3G. We do not think RJio has a mass-market service that could be delivered affordably (from the perspectives of handsets and service) and hence appeal to the mass market. RJio is a green-field entrant and it lacks the brand awareness of the market leaders (Bharti Airtel, Vodafone and Idea), which have created superior brands over the past 18 years. Global telecom operators, such as DoCoMo, Telenor and Etisalat, have struggled in India in competition with the current
market leaders.
