RJio Delays 4G Launch Yet Again
The much anticipated launch of 4G services in India by Mukesh Ambani-led Reliance Jio (RJio) has been further delayed by at least a quarter, according to a recent company filing with the Bombay Stock Exchange (BSE).
"Financial year 2016-17 is projected to be the first year of commercial operations for RJIL [Reliance Jio Infocomm Limited]," said the BSE filing. This comes after the operator had previously indicated it would launch operations by the end of the current calendar year, after picking up a pan-India 2.3GHz license in 2010. It has invested nearly 1 trillion India rupees ($15.1 billion) in operations so far. (See RJio to Launch 4G in December.)
This delay could have a major impact on Reliance Jio 's prospects in the Indian market. It will give existing mobile operators more time to prepare for and publicize their own 4G service launches. And as RJio's rivals launch 4G services, it will get all the harder for the new entrant to lure customers from other players.
Indeed, Bharti Airtel Ltd. (Mumbai: BHARTIARTL) -- RJio's archrival -- has already launched 4G services in around 300 towns and cities. Vodafone India has also unveiled plans to introduce a 4G offering by the end of the year, while Idea Cellular Ltd. has indicated it will launch 4G by the first quarter of the next calendar year. Once these leading players begin offering 4G services to their existing customers, it will be much harder for RJio to attract high-end data subscribers of its own.
"The RJio delay has encouraged the incumbents to rightly believe they could migrate a meaningful part of their 3G subscriber base to their own 4G networks and thus minimize the potential churning of their premium customers to RJio's network later," says Deepak Kumar, the founder analyst at market research firm BusinessandMarket. "While this may not result in an immediate swell in their [the incumbents'] 4G subscriber bases, the rollouts have now become a strategic necessity to stay relevant in the game."
At the same time, however, 4G launches by rivals could help RJio by expanding the addressable market and educating consumers about the benefits of 4G. They could also aid the development of a 4G ecosystem, helping to lower equipment prices, and allow the industry to address some teething problems unique to India.
"There are two opposing forces at play here. On the positive side, the delay is a blessing in disguise for RJio as it allows the market to be more ready for LTE and RJio to launch a good product," says Rohan Dhamija, a partner with consulting company Analysys Mason . "On the flip side it does give the incumbents more time to prep themselves in terms of strategy as well as on-the-ground rollout of 4G network."
— Gagandeep Kaur, contributing editor, special to Light Reading