Airtel & Idea Shrug Off Reliance Jio Infocomm 4G Voice Threat
India’s largest Wireless Carrier Airtel dismissed any near term threat from the launch of Reliance Jio 4G LTE Infocomm Services. DoT recently gave the Green Signal for 4G / BWA Operators to offer Voice Services by acquiring the Unified Access Services License in addition to the ISP License they hold so that they can offer full Voiice Services. Airtel does not see recent news flow around LTE as an impediment to its voice and data strategies.
Airtel further emphasized that its per-minute realizations should improve gradually over time. Airtel believes that industry needs price improvements. Higher input prices and lower competition post the Supreme Court verdict are likely factors in this context. Recent leadership Changes and simplification of its organization structure will further reinforce its execution strategy.
Idea Cellular echoed similar to Airtel,
any new mobile entrant is unlikely to change market dynamics unless it can offer strong execution on a daily basis, along with consistent customer service. LTE services could also face challenges with regard to propagation and voice.
Idea management pointed out that Overcapacity in the sector is declining as high spectrum prices have raised entry barriers. Also, competition has shrunk in terms of the number of operators and geographical footprint. Overall positive for the Wireless / Movile pricing. Idea expects the Indian telecom market to grow from ~US$30bn currently to ~US$50bn in next 3-4 years. Both voice and data services should see robust growth, led by deeper subscriber penetration and improving smartphone affordability.