Reliance Jio Infocomm does not have a Data Only Business Model in India for the next few years. So if 2G Voice is a must, why can’t Reliance do a CSFB arrangement with an existing operator ? It could tie up with existing 2G/3G operators to offer voice calls using CSFB. However, we doubt if a voice business can run completely on leased capacity especially in a spectrum-starved situation such as the one in India.
The other possibility is that Reliance Jio Infocomm builds out its own 2G network by acquiring spectrum in the upcoming auctions (or by acquiring an existing operator). Thus, Reliance could have an underlying 2G network to drive coverage (essential for voice service) and have an LTE network as an overlay on this 2G network. Reliance has lobbied hard with the Government and will soon acquire a UASL required to provide voice service paying Rs 1,650 Cr.
Is Videocon Really Front End Company for Reliance Jio ?
As whispered in market circles, Videocon is the front end company for Reliance Jio building a 1800Mhz Voice and FDD-LTE network but chose to bid selectively and is likely to expand its presence in subsequent Spectrum auction and establish a nationwide foot print. Now if Reliance Jio was front end company why would Reliance separately pay Rs 1,650 Cr UASL License fees when Videocon has already paid the same ?
Mukesh Ambani and His Clout in manipulating Policies In the past, Reliance has been able to manipulate Government policies from Polyester & Petrochemicals [1992] to CDMA Mobile Service launch [2002] to stay ahead of competition. However, chances are bleak this time as Mukesh has an enemy within and many outside. With the nation losing trust in the Corrupt UPA Government after the Multi Billion Dollar 2G Spectrum Scam, the writing on the wall is clear – Any Biased Decision especially on Spectrum will land in the Court of Law with a long and tedious battle for all stakeholders. Chances are high that M&A rules may still be rigged in favor of Reliance Jio but Seller will command an exit premium.
In this backdrop, Reliance Jio Infocomm has Herculean tasks ahead – Network & Tower Rollout, Evolving eco-system of 4G-LTE, Lack of International Bandwidth and fierce competition from Airtel, Vodafone, Idea Cellular, DoCoMo and Reliance Communications on all fronts.
Why is 2G based voice a must for Jio? What would be wrong with a VoLTE based business plan wherein Jio is allowed to interconnect with the PSTN?
The article you cite only considers ‘LTE with CFSB’ as an alternative to ‘Data Only’ services.
2G Voice is still 90% of the Indian Wireless Revenue and to achieve seamless coverage it is impossible to do so with Reliance Jio’s 2.3GHz Spectrum. VoLTE is still emerging and Consumer Device eco-system will be thinly penetrated. Now that they have struck an agreement with RCom, they are likely to go for a MVNO kind of arrangement for Voice.