What is Reliance Communications 3G / EVDO Mobile Data Strategy ?

Reliance communications 3G Mobile Data StrategyReliance Communications has divided all the telecom circles in 3 categories – 3G metro, 3G circles and 3G dark circles (where RCom does not have 3G spectrum). RCom plans to use a combination of 3G and CDMA to penetrate the data users in 3G metros and circles according to the requirement of subscribers (for example dongle users will stay on CDMA, while smart-phone users will rather use 3G H+ Network).

The company intends to use CDMA in 3G dark circles, where RCom has not won 3G spectrum. RCom plans to keep data intensive subscribers on CDMA network and shift voice-only subscribers to GSM network to better utilize spectrum. Also, for voice only subscribers GSM has better eco-system. RCom is also working with equipment manufacturers on developing eco-system for GSM + CDMA phones. Notably, CDMA is more data-friendly technology than GSM. Hence, the company plans to focus on every circle individually. We believe this is an industry-practice that operators focus on each circle separately as per the competitive intensity, pricing framework and other parameters.

RCom has launched different strategies for data pick-up such as – 3G at 2G’s price and unlimited data packages. Management suggests that such schemes are seeing meaningful adoption in the market. However, the revenue and profitability impact of these efforts are hard to estimate. Management suggests that the company has lower data realizations due to the data pricing strategies.

For now, RCom’s spectrum portfolio remains lucrative. The company is also exploring new opportunities such as Mi Fi devices to drive data revenue growth. RCom is seeing meaningful decline in data realizations, which needs watching. Hence, we are yet to see the proof points of success of RCom’s different strategies in the form of increase in subscriber and revenue market share.

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