Last mile connectivity is the biggest challenge for 4G since the tower density needs to be much better than 2G/3G due to signal strength concerns. This is complicated the number of agencies (municipalities, housing societies, offices, etc) Jio has to seek approval from for laying infrastructure with minimum disturbance to existing ecosystem and managing the rhetoric around radiations.
As we write this, large parts of Mumbai have seen the laying of optical fibre cables by Jio. Further, in congested areas where telecom towers are difficult to put up, Jio has put up mini-towers (see below). Since they can be put up on existing street-light poles, traffic junctions, footpaths, etc the entry-barriers are low, both in terms of regulation / permissions and costs.
4G mini-towers (Ground Based Masts or GBM) have been put up on / are doubling up as utility poles in highly crowded areas (as below) to provide last mile connectivity
Despite the infrastructure challenge in urban areas, we expect Jio to do very well in cities like Mumbai, and Gurgaon, simply because the demand for rich-services in these areas in India is humongous both for business and personal use. The scalability of the service proposition into rural areas/hinterland is the business challenge for Jio. We note that there are enough phones featuring multi-band LTE capability which cost below Rs 9000 (~US$ 140) available off the shelf in India already. We believe that incumbents will definitely be under-pressure in the near-term as Jio’s entry will likely trigger a painful price-war.