Jio-Politics of India's Telecom Sector: Expanding 4G Footprint in India
All of India's telecom operators are expanding their 4G footprints across the country. Competition for communications and content is heating up.
Economic Times reports that Reliance Industries (RIL) Chairman Mukesh Ambani has said that the telecom unit is "ready" to roll out its fourth-generation (4G) services, and will cover 80% of India's 1.3 billion population by the second half of 2016. "We are ready to launch (4G services) and in the second half of 2016, 80% of India's population will have high-speed mobile broadband Internet. So, 80% of India's 1.3 billion Indians will have high-speed mobile Internet," Ambani said in a television interview to CNN International's Fareed Zakaria aired on Sunday. RIL will be offering high-speed broadband services through its unit,
Reliance Jio Infocomm, is the only telco to own 4G bandwidth across India. Jio is widely expected to launch commercial services around April, a development which experts say will disrupt the market by bringing in intense competition on tariffs. "By 2017 end, we would cover 90% and by 2018, all of India will be covered by this digital infrastructure," Ambani said. The oil-to-telecoms conglomerate on December 27 last year had soft-launched its 4G services, offering connections to its nearly 120,000 staff members, associates and their families, and offered 4G SIM cards and discounted LYF-branded 4G-supporting handsets through its retail arm Reliance Retail.
Jio has said that it would have invested over Rs100,000 crore by the time of its commercial launch in buying spectrum, setting up networks, in marketing and sales and in human resources, among others. When asked about the massive investments RIL is making in its telecom foray, Ambani said spending on creating a digital infrastructure is "a very good investment". The country's richest man said that India could not be left behind in global digital revolution. "In the next 20 years, in a network society, we are going to have a change much more than what we have seen in the last 100 years," Ambani said, adding that digitisation will be at the forefront of the digital revolution. "As we saw in the year 2012-13, India is 150th in the world in mobile broadband penetration as well as quality. And Jio has really been conceived to change this position," the Indian billionaire said.
Mukesh Ambani's 4G foray is his re-entry into telecom sector after the public split with his younger brother Anil Ambani that led to the conglomerate's telecom business going to his brother. Anil runs the telecom business under Reliance Communications. After a patch up some years back, the two brothers are now cooperating to offer 4G services across India and are poised to take on established players like market leader Bharti Airtel, No. 2 telco Vodafone India and third ranked Idea Cellular. The incumbents though have already launched their respective 4G services, with Airtel having the largest footprint in the country, in over 350 cities and towns. Reliance Industries had obtained pan-India Broadband Wireless Access (BWA) spectrum in 2010 by buying out a company which had won 4G airwaves for Rs 12,847.8 crore.
But technological challenges around the 2300 Mhz bandwidth won then has meant that Jio is yet to launch commercial services. It though has subsequently acquired airwaves in other 4G bands, and now has a highest quantum of spectrum across the 800 MHz, 1,800 MHz and 2,300 MHz bands. India Ratings and Research (Ind-Ra) in a recent finding said that RIL's proposed 4G launch will intensify competition and is poised to squeeze market share, EBITDA margins and credit metrics of core incumbent players such as Bharti Airtel, Vodafone India and Idea Cellular.