Traditional media is Gung Ho about whatever Mukesh Ambani does and in the process doesn’t weigh the Business / Model and just paints a shangri-la picture irrespective of what the outcome is.
It is well known fact that 3G hasn’t gained much traction despite eco-system in place as affordability is still the main concern. In the context of this, let us see what is Airtel’s strategy in rolling out 4G LTE Broadband Wireless Access services ahead of others.
Everybody expected Reliance to launch and market 4G services, but how is it possible to build telecom infrastructure overnight ? Airtel took everybody by surprise and 4G launch has raised several questions, including whether there is any need for 4G services at all in view of the slow take-up of 3G services ?
Airtel’s selective launch of services is more of a defensive move than part of its core strategy. Airtel may corner some share in the residential broadband market, but its main intention is to establish downside protection should Reliance Infotel implement an aggressive BWA launch [It is only possible by Partnering with Reliance Communications for passive Infrastructure]
Airtel is in serious discussions with Qualcomm to BUY its 4G BWA Spectrum. Two main reasons why Airtel is desperate to acquire 4G BWA Spectrum especially in Metros [Delhi & Mumbai] is because of the uncertainty of of 700 MHz spectrum auctions and the BWA strategy adopted by arch rival Reliance Infotel.
700MHz Spectrum Auction With the time-line TRAI gave for 700MHz Spectrum Auction, the best suited for 4G LTE services, it makes sense for Bharti Airtel to acquire additional BWA spectrum, especially in Metros which has tremendous potential. Auction of 700Mhz may not happen until 2015 with Policy Paralysis with Scam Scarred Dr. Singh Government.
Airtel wants to Combat Reliance 4G Strategy An aggressive 4G LTE BWA launch by RIL Infotel, which has pan- India LTE spectrum, would put pressure on Bharti airtel to acquire additional BWA spectrum. A selective BWA launch by Reliance would be more favourable to Airtel.
And before concluding let us now not forget how Airtel under Sunil Mittal has grown from a Cellco with one Circle in India to become India’s number one Wireless Carrier and now services spanning across 22 countries. This always reminds me of Sunil Mittal’s interview where he has made it clear that he will skip Shareholder Dividends, Bonus etc for expanding his footprint across the bouquet of telecommunication services 🙂
Stay tuned we will see some of Mukesh Ambani’s Reliance Infotel Broadband Strategies!
Absolutely correct. Airtel is trying to pre-empt any
revenue risk arising out of BWA rollout from Reliance, as it will match the latter’s offerings in Delhi & Mumbai which contributed 16% of industry cellular revenues at the end of Dec 2011.