Why Reliance Jio Infocomm may Takeover / Merge with Reliance Communications ?

Reliance Jio Infocomm Office65% Anil Ambani owned and Managed Reliance Communications is under Deep Trouble with debt levels continuing to be high (net debt to EBITDA of more than 5x) despite consistent free cash flow generation. The management has not shared any insights on asset monetization in the pipeline to reduce leverage. RCom has signed Tower Sharing and Inter-City Optical Network Sharing Deal with Reliance Jio Infocomm. In this backdrop, we analyze how Reliance Jio Infocomm will eventually takeover Reliance Communications.

In the Recent Past, RCom’s capex is a fraction of

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Reliance Jio Infocomm Likely to Bid in upcoming 1800Mhz Spectrum Auction

Reliance jIo Bid in AuctionReliance Jio Infocomm has objected to the telecom regulator’s recent recommendation of an uniform spectrum usage charge of 3% of revenues after 1st April 2014, for all spectrum acquired through an auction. Reliance Jio is the telecom venture of Reliance Industries. It acquired 20Mhz pan-India spectrum in 2.3GHz band through an auction in June 2010 at a price of Rs128bn. The spectrum carries a charge of 1%.

Reliance Jio had acquired

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Reliance Jio Infocomm’s Voice Service – BUY WholeSale Minutes or More Spectrum ?

Reliance Jio Infocomm thinks big like the Ambani DNA. As the Economic Progress in India came to an halt, affordability of 4G got pushed back by few more years. In this backdrop, 2G Voice continues to be the Cash Ringing Register for Telcos.

The State of Voice over LTE
With challenges in commercial VoLTE deployments, circuit switched fallback (CSFB) has been the more popular form of providing voice and data services globally. CSFB allows the subscriber to use data services over 4G networks but switches back to the traditional 2G/3G networks when using voice. Globally, only MetroPCS and Korean operators have launched VoLTE services and the technology is still

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What is Reliance Jio Infocomm’s Game Plan for 4G LTE ?

For markets like India and Africa, the data growth story is linked to low cost smart-phones. With LTE deployments taking place simultaneously in India and the globe, Indian operators face a big challenge in terms of driving LTE economics. India would lag the US in LTE affordability by 11 years based on a 20% yearly rate of decline in technology costs and by 5 years based on a 40% yearly rate of decline in technology costs.

All BWA operators in India will launch the TD version of LTE and their fate is somewhat dependant on the progress made by China Mobile. China Mobile will not be entirely dependant on low-cost smartphones to drive traction on LTE. Indian operators, on the other hand, may have to wait for the LTE ecosystem to align

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Is Reliance Jio Infocomm Rolling Out FTTH Broadband Network along with 4G/ LTE ?

Reliance Jio Infocomm will launch 4G / LTE Services by the end of this year, at least in Delhi NCR and Mumbai region. According to Analysts in the Research community, their is a buzz that Reliance Jio Infocomm will launch FTTx [Home / Enterprise]

G V Giri @ IIFLCap said,

RIL may also use FTTX (Fibre to the x) to service the home and enterprise broadband market, chiefly the former. It may bundle broadband services of various hues above in a single offering

Goldman Sachs Report said,

RIL’s focus is on offering high speed services and considering that TDLTE ecosystem is at a nascent stage, we believe the company will focus more on fiber based fixed-line services and nomadic LTE (in limited areas) in the near term

Other Device & Services  that Reliance Jio will launch along with 4G LTE Launch is as follows,

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Reliance Jio Infocomm & Reliance Communications enter $2.5 Bn Tower Sharing Agreement

Reliance Jio Infocomm Ltd and Reliance Communications Ltd. today announced the signing of a definitive agreement worth over $2.5 Bn over the Lifetime of the agreement. RCom will offer its 45,000 Towers to Reliance Jio Infocomm to roll-out its 4G LTE Network. In our Previous Article we had raised the issue of Suitability of Reliance … Read more

RCom’s Tower Assets for Reliance Jio Infocomm – Not Suitable

Reliance Communications co-operation with Reliance Jio Infocomm is expected to be extended to tower assets and intra-city fibre assets as well. We raised some Key Questions with the managements of both the companies which have went un-answered. 1. Quantum of towers which will come up for monetization over next 2 years- We are of the … Read more

Reliance Jio SmartPhone Tablets to be Launched with 4G Broadband

Reliance Jio Infocomm’s Tarun Jhunjhunwala, Business Head East Indian Operations has said, We have plans to provide 4G services at affordable rates. Talks are on with device manufacturers for dongles, tablets and smartphones Reliance Jio is planning akin to something in the US market where the Hardware is Subsidized upon subscription to Data / Voice … Read more

Reliance Jio Infocomm & Reliance Communications Intra-City Fiber Deal Likely at 4000 Cr

Currently 40% of Reliance Communications tower assets are supported with fibre backhaul and the remaining 60% is on Microwave backhaul as described here. We believe that Reliance Jio Infocomm 4G launch will allow Reliance communications to monetize intra-city fibre given Reliance Jio’s likely focus on data market.

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4G LTE to Account for Over $1 trillion in Revenues over 5 Years

According to Juniper Research, 4G LTE mobile broadband service revenues over the next five years will account for over $1 trillion, representing approximately 17% of the cumulative operator billed service revenue from all mobile services. Nitin Bhas in the Report says, Along with the 4G network roll-out, the 4G/Wi-Fi combination will continue to provide a … Read more