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Reliance Jio may commercially rollout its 4G services in next three months says CLSA

The much anticipated Reliance Jio, which is likely to come with free 4G voice calls and high-speed data will be released in the next three months confirms brokerage and investment group CLSA. CLSA believes that

India TV Tech Desk, New Delhi [ Published on: July 22, 2016 13:45 IST ]
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The much anticipated Reliance Jio, which is likely to come with free 4G voice calls and high-speed data will be released in the next three months confirms brokerage and investment group CLSA.

CLSA believes that Jio’s network can easily handle usage of 5 GB per month data each by over 100 million subscribers. “This large capacity may form the core of Jio’s strategy,” it said.

“Several indicators suggest a strong possibility of commercial launch of Jio’s services within the next three months ahead of festive season in October… Jio may already be handling the second-highest data traffic among all telecom operators and could ramp up close to the highest even before launch,” it further added in a note.

In a separate note, Kotak said the recent price cuts announced by Bharti Airtel and Idea on select data packs have two clear strategic intents — substantially improving the price-value equation of higher usage and ARPU packs, and bettering the price-value equation of the entry-level trial/sachet packs. Interestingly, rates of packs of 500 MB-1.5 GB have not been touched, it said, adding that Vodafone may follow suit soon.

“We note that several packs (especially the ones with monthly allowance between 300 MB and 1.5 GB) have not seen any price reduction or allowance increase. This, in our view, makes the intent of the price moves reasonably obvious,” it said.

CLSA said Jio SIMs with 3-month complementary service were recently extended to non-LYF phone buyers of premium Samsung 4G phone models as well. It may extend this offer to users of Apple as well as HP devices in the next few days. Also, Jio is seen to kickstart its advertisement campaign soon as it has become the principal sponsor of India’s Olympic contingent for the 17-day event starting August 5.

“This along with the launch readiness indicated by the management in its post (Q1) results analyst meet suggests an imminent launch,” CLSA added.

With 1.5 million subscribers using an average of 26 GB a month, Jio’s monthly data traffic is nearing 39 million GB.

“Using fourth quarter 2015-16 mobile data traffic (2G+3G) of incumbents, Jio’s network may already be handling the second-highest data traffic,” it said.

The recent drop in entry-level price of LYF’s 4G phones to sub-$45 and addition of subscribers beyond LYF phones may boost overall traffic and Jio the largest data network even before its commercial launch, the brokerage predicted.

“Our tests reveal no notable drop in user experience despite major rise in data traffic, which points to Jio’s large capacity,” CLSA said. “Milking its large capacity will be the core to Jio’s strategy of offering data at attractive unit pricing and still achieving high targeted average revenue per user (ARPU).”

(With PTI Inputs)

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