Jio Kills Cash Registers of Airtel, Vodafone, Idea Lobby

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 (more…)

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

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 (more…)

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

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 (more…)

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

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 (more…)

State of 4G LTE Device Eco-System in India

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 (more…)

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