Reliance Jio Infocomm is a grand experiment in extreme capitalism; an experiment where a company, backed by the balance sheet and cash flow strength of the parent’s Oil & Gas business, has unleashed what we call brute force of capital with business strategy which can draw parallels with the operations in Silicon Valley.
Jio’s disruption in the 4G LTE Space has caused #2 (Vodafone) and #3 (Idea) players to consider and announce a merger (in-principle agreement announced; not consummated yet) we do Continue reading Jio Heat Wave too intense for Vodafone + Idea – Is TRAI Biased ?
With the extension of free trial to Mar 2017 and recent announcement of incremental investment of Rs300 bn in the telecom venture, Jio is clearly not pulling any punches. This forces incumbent telcos to speed up 4G rollouts as sunsets on 2G networks which are a drag on the precious spectrum as we head into an era of convergence.
Whilst there are media reports of incumbent telcos considering a merger, we believe that the same is unlikely to fructify given: (a) all three incumbent operators have significant revenue market shares (>19%) and are unlikely to be Continue reading Merger of incumbent Vodafone + Idea or Case for Active Infra Sharing ?
Airtel, Vodafone and Idea [A-Vo-Id Operators] have come up with a very clever strategy to counter Reliance Jio Infocomm’s Mobile Data revolution. A-Vo-Id lobby will split the Indian Telecommunications services market based on Voice Vs 3G/4G Mobile Data. Justifying their stand, they put up an argument that 2G phones still dominate. Of the approximately 1 billion connections, there are 750m/200m/50m 2G/3G/4G handsets. [We estimate there are 65 Mn 4G handsets expected to reach 100 Mn by end of 2016] The 4G market will move to bundled plans whereas 2G/3G will remain unbundled.
Annual subscriber additions in India is about 75 Mn. A-Vo-Id lobby further assumes Continue reading Airtel, Vodafone, Idea to divide market into Voice vs Mobile Data to counter Jio
The 800 pound gorilla, Reliance Jio Infocomm’s entry will shake the Mobile Broadband Data Market in India at a much faster pace than it had in the past when Challengers [Aircel, DoCoMo, Uninor, etc] entered the Voice market in India and expect it to repeat but at much faster pace in the Mobile Data War.
Airtel’s data ARPU is Rs 200 and Idea’s data ARPU is Rs 150 – today, 20-25% overall subscribers of these companies are data subs. If data upgrades takes place Continue reading Jio Launch – Mobile Data ARPU Decline Inevitable, Subs / Volume Growth Tepid
Pure Play Wireless Operator, Idea Cellular believes that wireless internet penetration at less than 31%, mobile data will be the next big opportunity for operators. Current data expansion phase is similar to the 2006‐2010 voice expansion phase wherein telecom operators improved coverage and dropped prices to accommodate a substantial jump in subscribers, leading to revenue growth. Idea believes there are only 4‐5 serious operators in the data space including Reliance Jio and with non‐top 3 players Continue reading Indian Mobile Data entering phase of 2006-2010 Voice Business – Idea