4g-lte-india

Jio Kills Cash Registers of Airtel, Vodafone, Idea Lobby

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Jio’s business case, at some level, needs the support of an industry size that is materially larger than what it is today. Jio has a reasonable business case in a market where the other incumbents Airtel, Vodafone and Idea – A-Vo-Id lobby has one.

Jio is well funded by its parent and its discounting model is hurting the A-Vo-Id Lobby and it can potentially drag the industry size down to such low levels in the near term that raising it to the needed for a reasonable business case levels within a reasonable time frame may become near impossible.

In the Worst Case a 60%+ yoy decline in India wireless EBITDA levels of the industry (ex-Jio) in FY2018 to under Rs 200 bn levels. For an industry

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Reliance Jio – 72 Million Subscribers – Captures 55% of 4G LTE Market

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Jio’s announcement of 72 mn Prime membership sign-ups were above our expected 35 Mn. The bigger surprise, however, was Jio’s decision to extend free services by another three months despite now having 72 mn subs who paid `99 one-time charge to express their willingness to pay for Jio’s services from April 1, 2017. Assuming around Rs 250 as likely ARPU from these 72 mn subs, Jio has essentially decided to leave nearly USD800 mn ( RS 54 bn) in revenues on the table.

Jio’s free service offerings, since Sep 2016, get another 3-month extension with a slight twist. The fresh three months’ worth of complimentary

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How Reliance Jio will Mitigate Network Quality Issues with 800 Band Spectrum ?

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Reliance Jio Launch DelayedAkash Ambani led Reliance Jio Infocomm has created the required hype and expectations for a High Speed 4G Mobile broadband. However, like any other Telco, Reliance Jio has its share of woes to stabilize and achieve network coverage with the spectrum band its is operating in 2300Mhz and 1800Mhz thus pushing the big bang nation wide launch further ahead. In this backdrop, Jio’s boss Mukesh has smartly shed his ego and shook hands with his estranged brother Anil Ambani’s Reliance Communications which owns 800Mhz spectrum, the best suite for 4G-LTE services.

Jio will manage launch well before December 2016

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Airtel 4G LTE PAN India Spectrum Complete, May Skip 700Mhz Auction

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Airtel 4G LTE PAN India SpectrumIndia’s Largest Telecom Operator, Airtel has acquired 2300MHz in 8 Circles from Aircel to complete Pan India 4G-LTE Footprint by virtue of combination of 1800Mhz and 2300Mhz contiguous spectrum blocks.

The acquisition of spectrum in three circles has been done at a total consideration of INR35bn (~4% of current net debt at the company). Aircel had paid INR 34bn for this spectrum in the 2010 auction, which implies a 47% premium that Bharti has paid when adjusted for residual life. The same spectrum has a reserve price of INR 44bn in the upcoming auction, so Bharti has only paid a 14% premium when adjusted for residual life vs this. The impending entry of Reliance Jio has

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State of 4G LTE Device Eco-System in India

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4G EcoSystem IndiaSmartphone adoption in India is increasing at a fast pace driven largely by device affordability and increasing relevance of devices in day-to-day lives. At the same time, mass adoption of 4G in the rest of the Asia Pacific region has led to steep fall in price of LTE components and consequently LTE devices. The two factors combined with the Indian telcos’ accelerated 4G launches, are driving radical changes in the Indian smartphone market.

Around 42% of all mobile phones shipped into India in CY2015 were smartphones as compared to 10.8% in CY2011; during the same period (CY2011-15), total smartphone shipments grew at a CAGR of more than 50% (source: Gartner). 4G devices are also increasingly

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How RCom gets Free Ride on Reliance Jio’s 4G Network ?

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RCom Gets Free 4G from RJioRCOM has entered into active infra sharing with 4G entrant Reliance Jio, which allows RCOM to offer 4G services without investing much capex. RCOM active sharing limits the upside for the buyer of RCOM towers assets as demand by RCOM (anchor tenant) for additional towers in the near to medium term may not be much.

In our view RCOM had the option to either ask for a premium from Jio for trading of 800 spectrum or leverage Jio’s 4G network and offer 4G services. Charging a premium may have allowed RCOM to pay down some debt and invest in 3G but may have prevented RCOM from participating in 4G.

RCOM has chosen to offer 4G by leveraging Jio’s 4G network. Given that in the medium to long run 4G is likely to be more popular than 3G,

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Bharti Airtel Bids for Videocon’s 4G LTE 1800 Band Spectrum

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Airtel 4G LTE Spectrum Bid on VideoconSunil Mittal led Bharti Airtel announced that it has entered into a definitive agreement to acquire right to use 2X5 MHz spectrum in the 1800 MHz 4G LTE band from Videocon. This deal, if concluded, will mark Videocon’s exit from the telecom market. This deal happened amidst the cancellation of earlier sale of Videocon’s spectrum to Idea Cellular. The acquired spectrum in all six circles (valid until December 18, 2032) is contiguous in nature and can be used to offer LTE data services. The acquisition will further strengthen Airtel’s 4G LTE footprint, with LTE (both FDD and TDD) spectrum covering 93% of its overall revenue or 19 out of a total 22 circles.

Airtel will acquire Videocon’s spectrum (2X5 MHz in the 1800 MHz band) in six circles namely Bihar, Gujarat, Haryana, Madhya Pradesh,

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Blind Gaming by Incumbents Amidst Reliance Jio Launch

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Mobile Broadband Vs VoiceGiven the impending threat of Reliance Jio entry, incumbents – Airtel, Vodafone & Idea have accelerated the pace of mobile broadband data network rollout in a blind game forgetting the Economics of Return on Investments. Cumulatively, they have added 72.8K 3G/4G BTSs over the past four quarter (total installed base of 172.5K), with Airtel having added 35.7K, Idea 19.8K and Vodafone 17.3K during the quarter. Idea increased its capex guidance to INR75bn (from INR60-65bn earlier), the third increase in capex guidance over the last 9 months (1.5x of initial guidance), on account of faster data rollout.

Two key debates would continue for the sector – 1) pricing vs volume and what it does to the market dynamics; and 2) capex intensity vs returns – how much is enough given the slowing mobile data growth [3G / 4G].

Idea which in the past has

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How Vodafone and Airtel are vulnerable to Jio’s Public launch ?

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Vodafone IndiaAkash Ambai led Reliance Jio Infocomm is all set for public launch within the next couple of months. Before we dive into the details on how and why Airtel / Vodafone are the most vulnerable operators let us quickly look into data with ears on the ground.

Jio will launch with about 75,000 Cell Tower Locations and about 20,000 Small Sites / WiFi Spots. Target Locations of Launch – Metro Cities, Urban Centers and Semi-Urban Towns. Rural is excluded in the initial public launch and there are no Jio 4G signals in rural areas.

With such a Network Arrangement, Jio’s addressable market is 400 Mn Wireless Consumers in the above said geographical areas. How are these consumers stacked up ?

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Reliance Jio – Looking Beyond Network

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Jio-Lyf-MobilesOver the last 18 months Reliance Jio’s has been on infrastructure, technology, and rollout milestones, amongst others. With the soft launch for employees having started, we look beyond the basic infrastructure and into product strategies.

RJio’s 4G network ourselves, is on par with incumbents in the urban areas, but is lacking in rural areas (maybe have roaming arrangements). Importantly, VoLTE works seamlessly in interconnecting with regular mobile/fixedline networks. The speeds are quite impressive, but remember it is also an empty network! Reliance Infocomm was reaching to masses however this time the strategy is exactly the opposite – Reach High End Customers with Unmatched Mobile Broadband Offering.

The biggest difference in RJio’s business model

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