Reliance Jio Infocomm’s launch of the much anticipated 4G services seems imminent this year with new developments and details coming out every day.
Reliance Jio has already acquired Network 18 Group which could give it an advantage over the competition, especially when content is concerned. The company is investing Rs 40,000 crore and is leaving no stone unturned to make this venture a success. Reliance Jio has also signed a number of infrastructure sharing agreements with Bharti Airtel, Reliance Communications, Viom, Ascend and Tower Vision.
With developments every day, the question that is begging attention is how RJio’s arch-rival Bharti Airtel is preparing to defend itself? Bharti Airtel’s biggest advantage is that it can leverage its presence in all services (2G, 3G and 4G) to offer a plethora of services vis-a-vis Reliance Jio’s entire focus on 4G services. However, RJio now boasts of a unified license, so is in a position to offer other services as well. Bharti Airtel also has more than 1 million broadband customers in 85 cities, who are connected by optic fiber. The company has the advantage of having fiber across the country. However, Reliance Jio has tied up with Reliance Communications for the use of their fiber, thus offseting Bharti’s advantage.
Airtel has already launched 4G services in a few cities (Bengaluru, Pune, Kolkata, Chandigarh and Ludhiana). The company today has 58 million data subscribers across all platforms (2G, 3G and 4G). It has also conducted Circuit Switched Fall Back test which would enable it to offer voice as well on 4G networks. All this certainly gives Airtel a first mover advantage where technical challenges are concerned.
Morever, the company should also be more aware of consumer expectations. The user patterns would give the company key insights to launch products and packages that are in keeping with the consumer requirements. On the other hand, Reliance Jio is starting from scratch and will have to build the competencies as it goes along.
Analysts and experts are largely of the opinion that the launch would be disruptive in nature and would dramatically bring the tariffs down. This reminds one of Tata Teleservices bringing down the tariffs by offering services for as low as 1 paisa per second. That had driven other telcos also to bring down the tariffs. However, in the long run that became unsustainable. So in the long run, a disruptive pricing is unlikely to work. Yes, it can help a greenfield telco in garnering new subscribers but that cannot be everything.
Bharti Airtel might need to push its 3G services in a big way to combat RJio’s attack. As of now, it has around 12 million 3G subscribers. Recently, all 3G telcos have got a major push with TDSAT ruling in favor of 3G roaming deals, which means that the telcos can sell 3G plans even in circles where they do not have 3G spectrum. This means that Airtel can now offer 3G services across the country. The company is slowly strengthening its 3G business by expanding the network across the country. In the last one year, it has added more than 6,000 sites to its 3G network.
-Gagandeep Sodhi, Editor, Light Reading India