One thought occupies the minds of executives at India's biggest service providers: How can they put as much 4G distance as possible between themselves and Reliance Jio, a new entrant that is now close to launching commercial 4G services of its own?
Market leader Bharti Airtel Ltd. (Mumbai: BHARTIARTL) has already deployed 4G in more than 300 towns and cities, while third-placed Idea Cellular Ltd. has rolled out the technology in more than 100 cities. Vodafone India , the country's second-biggest operator, is also launching 4G.
Each of the incumbents is determined to gain a first-mover advantage, hoping this will stem an exodus of customers once RJio enters the market. Although Reliance Jio recently flagged a launch of 4G services, these are currently available only to the 100,000 employees of parent company Reliance Industries Ltd. (RIL) . (See RJio Sputters Into Lyf With 4G 'Launch'.)
But is the 4G strategy of the incumbents really paying off?
"As of now, the response to the launch of 4G services is not worth talking about," says a senior networking executive from a prominent Indian telco, who wanted to remain anonymous. "We are also offering bundled deals for devices but even then the uptake is limited.
"The main issue is that there is still a lot of capacity in 3G but we have to focus on 4G expansion, which is unlikely to give benefits any time soon," added the executive. "The only learning we are getting is in terms of consumer choice -- what kind of data they prefer."
Such concern probably explains why telcos are not comfortable talking about the number of 4G customers they currently have, with LTE networks largely unoccupied.
Indeed, while competition is forcing operators to invest in 4G, the on-the-ground reality suggests that a return on investment will not materialize for some time. (See Bharti's $9B Network Splurge in India.)
What's more, operators might inadvertently be helping RJio by raising consumer awareness of 4G and demonstrating the pitfalls of service launches to the new entrant.
Yet 4G in India is not just about a new network technology. It is also about the development of new and innovative services that will change customer behavior. In that respect, RJio would seem to have a head start over the incumbents. Unlike its long-established rivals, it has already come up with a number of applications, including Jio Mag, Jio Mediashare, Jio News and Jio Switch.
"We can confidently say that the return on this investment is definitely three to four years away," says Amresh Nandan, a research director with Gartner Inc.
Despite these dynamics, telcos have little option but to invest in networks now. Data usage is soaring. The mobile Internet user base in India is expected to reach 371 million by June 2016, as the average cost of accessing data services falls by 18%, according to a recent report from the Internet and Mobile Association of India and IMRB-International.
"On the consumer side, call quality is becoming a big issue, while the enterprise segment is moving towards mobility, with even small and midsized enterprises going in for the cloud," adds Nandan.
The next few months could see some major upheavals in the service provider landscape as 4G rollouts gather pace.
— Gagandeep Kaur, contributing editor, special to Light Reading