Challenges Galore for Reliance Jo Infocomm 4G LTE

Challenges for Reliance JioReliance Jio Infocomm which won the bid for 4G Spectrum in 2.3MHz will face a steep uphill challenge to push its data services. The demand for High Speed Wireless Broadband in India can be classified in three broad categories, viz. (a) dongle users [EVDO / 3G], (b) fixed wireless terminal (FWT) and (c) users of tablets, iPads and other handheld devices. The growth in each segment has its own challenges.

Reliance Jio faces the EVDO / 3G Dongle Challenge
Consumers for whom internet is a necessity, have already been captured by the EVDO (Evolution Data Optimised, a type of advanced CDMA data technology) players such as Reliance NetConnect, Tata Photon, MTS, etc and hence the market is likely to be more of a replacement market. Adding to the woes of EVDO Operators, 3G Service Providers Launched Dongle Services and are now offering Data on Dongle as cheap as Rs 65 a GB. Reliance jio would have provide tariffs at a discount to existing tariffs and subsidise the device, in order to encourage them to shift to 4G. This in turn would bring down ARPUs for the entire industry and the consumer stands to benefit.

FWT Customers
Again, tariffs would have to be at a discount to existing FWT plans, for users to have an incentive to switch from their existing internet connections to 4G services. Customers of integrated players such as Airtel / Idea have to deal with only one vendor for their voice as well as data requirements whereas exclusive 4G players such as Reliance Jio would have to build new relationships. This would create an obvious preference for integrated players.

Broadband Bundled Tablet Market Non-Existent
Wireless Broadband Bundled Tablet market such as the Apple iPads with AT&T in the United States is non-existent in India. The challenge for 4G players is lower in the tablet/iPad market as customers are yet to adopt these services. Assuming prices for tablets and tariffs for data are competitive between 3G and 4G, we believe customers are likely to prefer 4G over 3G, given the latest technology offers faster download speeds. Reliance Jio would have to develop a whole new big Market to cater to this segment.

For Reliance Jio, breaking the above three barriers will involve keeping tariffs low for mass market penetration thus reducing the return on investments.

Aircel Free Unlimited 3G in Tanjavur, Tamilnadu

Aircel IndiaNew Entrant, Aircel with a stronghold in Tamilnadu is struggling to gain 3G Subscriber Traction.

Aircel has announced it will provide to citizens of Tanjavur, Tamilnadu FREE UNLIMITED 3G between 6.00AM to 9.00AM for 30 days if subscribers sign-up for its 3G Offerings.

How to Activate Free Unlimited 3G from Aircel 3G Morning Plan ?
Just dial *122*456# from your cell and it should be activated in few minutes and then start browsing.

Aircel 3G Morning should in fact (more…)

Thai 3G Story Ahead of India

DTAC Launches iPhone 5  in ThailandThe Thailand 3G Story is ahead of India as it reaches around ~40% penetration with almost 50% of the consumers having Internet-ready handsets (smartphone/feature-phones).

Thai Consumers appear to be willing to spend more for data services. This is contrary to our Indonesia and Philippine findings, where most aren’t willing to raise spending. Networks have deteriorated and now majority of the respondents are willing to raise their overall telecom spend for better network quality or faster download speeds. Poor network quality, we believe, is linked to under-investment (more…)

2G/3G Data Revenue to Grow 40% YoY

3G business in India currently has negative returns, but should turn positive by F2016. Airtel and Idea reported sequential nonvoice revenue growth of 5% and 13%, respectively, in F3Q13.

Operators have been inching up their 2G data tariffs, while 3G data tariffs have come down by ~7x since the beginning of 2012. Data volumes in MB have grown by over 20% in the last two quarters, after a slow start, and the decline in data ARMB has been arrested. 2G/3G data revenues will be the largest contributor to data revenue growth, with annual growth of ~40%.

Smartphones / Data-enabled handsets priced within Rs5,000 help increase data traffic.

Idea Vs Airtel Vs Vodafone – 3G Coverage of RMS

3G spectrum auction in India led to a fragmented allocation across operators, with none of the operators winning pan-India. The incumbents (Bharti, Idea, Vodafone) were however, able to cover 65-75% of their revenue base. As a result of this fragmented allocation, these operators entered into intra-circle roaming arrangements with one another to provide a nation-wide 3G service using each others’ spectrum in circles where they didn’t win.

Idea appears best placed. Most of its important circles have been covered with 3G spectrum (74% of revenue). While it didn’t win the important Mumbai, Delhi circles, it should be noted that Idea is relatively a new operator in these circles, which is also reflected in its revenue market share. Late entry has resulted in relatively inferior quality subscribers who are less likely to use 3G services, at least in the medium term. This should moderate any impact from lack of high-speed data service in these circle. (more…)

« Older Entries