HOME > BUSINESS > Reliance Jio to launch 4G in Jan-March; Airtel, Vodafone, Idea may offer discounts – Fitch

Reliance Jio to launch 4G in Jan-March; Airtel, Vodafone, Idea may offer discounts – Fitch

FITCH-indian-telecom-jioReliance Jio, the telecom arm of Mukesh Ambani-promoted Reliance Industries, is likely to launch its 4G services any time from January to March next year, and will pose a credible challenge to incumbents, driving out weaker operators, Fitch Ratings said.

“Jio’s product is likely to gain traction – given the intention to launch an integrated product encompassing free messaging application, free Wi-Fi, cloud storage, digital news, entertainment and e-commerce services along with traditional voice and data services,” Fitch said. To cope, incumbent operators are likely to start offering discounts to their high-value customers soon, it added.

“Jio is likely to launch its cheaper and faster 4G-focussed data services in 1Q16 – having invested about $14 bn.. We expect the incumbent telcos to offer discounts and promotions to higher-ARPU subscribers in anticipation of Jio’s entry to prevent user attrition.”

At present, the big three operators charge about Rs 230 per GB of wireless data. It is expected that Jio will charge in the range of Rs 50-100 per GB — depending on usage. Only one operator — BSNL/MTNL — offers comparable data charges.

“We expect data tariffs to fall by at least 15%-20% as incumbents compete on price with Jio, which is likely to offer cheaper data tariffs to build market share. Voice ARPU will decline on lower usage as rising data usage will increasingly cannibalise voice.”

Jio’s announced deadline for launch is next month. It is speculated that it will launch of Dec 25, the birthday of Dhirubhai Ambani. (Meanwhile, Jio has already started testing its network.)

However, Fitch sees the launch in the first quarter of 2016.

It said Jio has the capacity to roll out in 900 cities in India, in addition to extensive sharing deals with RCom.

“Jio has an arrangement to share Rcom’s 800MHz/850MHz spectrum, 43,000 towers, 120,000km of inter-city fibre, and 70,000km of intra-city fibre network.”

The entry of the new operator will have substantial impact on the profits of existing operators such as Bharti Airtel, Vodafone and Idea Cellular, Fitch added.

“Industry blended tariff will fall as Jio’s entry will arrest the rise in data ARPU, despite rising data usage (2015 monthly average: 600MBs-700MBs), as voice ARPU will continue to fall on cannibalisation of voice by rising data usage. Voice usage will gradually decline; per user usage is among the highest in the world at 400 minutes per month.”

During year-to-date 2015, data revenue per user rose by around 25% while voice revenue per user fell by around 10%.

Though increasing data usage will be good news for big telcos, the drastic fall in data charges will mean that they will get less money from each subscriber even though their subscribers are using much more data than before.

Fitch expects each subscriber to generate only around Rs 160 per month next year (including voice and data), compared to 170 per month for the current year.

CONSOLIDATION

Now that the government has allowed companies to sell their auction-derived spectrum, some of the weaker companies will exit the field as competition hots up, Fitch said.

“Five to six operators will emerge from the industry shake-out. The top-four – Bharti Airtel Limited, Vodafone India, Idea Cellular and Reliance Communications Ltd – are likely to raise revenue market share to 80% (from 77% in 2015) as weaker ones exit. These are likely to acquire spectrum, from smaller loss- making telcos, to unclog their spectrum-starved networks,” it added.

Weaker unprofitable telcos including Videocon, Aircel Ltd and Tata could exit the industry as they make operating losses and lack key spectrum assets and financial flexibility to invest in data networks, Fitch said.

“Such telcos will seek M&A among themselves or trade their spectrum to larger telcos. We believe that Rcom’s acquisition of Sistema Shyam Teleservices may signal further M&A. Any large debt-funded M&A or spectrum purchase could be negative for the top-four telcos’ credit profiles.”
[socialpoll id=”2310457″]

Follow ULTRA.news
The Economics of Bharti Airtel’s 7777 offer on the iPhone 8 Bharti Airtel announced that it will sell high-end smartphones online with instant financing.The phones, including the iPhone 8, will be available at low downpayment and bundled monthly packages, which will make them more or less free of charge.The model was first tried...
Bharti Airtel merges Ghana arm with Tigo of Millicom Bharti Airtel said it is merging its operations in the African nation of Ghana with the local unit of Millicom International Cellular."Under the joint agreement, Airtel and Millicom will have equal ownership (50:50) and governance rights in the combined entity, which will ha...
PRICE CUT: Reliance Jio launches two new plans at Rs 295 & 449 4G operator Reliance Jio is all set to announce two new tariff plans this week, and both will offer 1.2 GB per day instead of the 1 GB per day that users currently get. Validity will remain at 84 days.The plans will be listed on the company's website this week.It will al...
Reliance Jio to withdraw Rs 399 plan next week Most customers of Reliance Jio, the country's largest telecom operator by volumes, will not be able to get the 84GB-for-399 plan starting next month, the company's deputy chief financial officer V Srikant said on Friday.Asked how the company's average revenue per user (billi...
Surprisingly, Reliance Jio is already profitable at PAT level Reliance Jio has reported revenue of Rs 7,213 cr, including GST, and an operating profit of Rs 261 cr for the second quarter of the financial year.However, after deducting costs related to the wear and tear of its machines, Reliance Jio reported a pretax loss of 414 cr. This...
Reliance Jio breaks even on opg level, 9.62 GB avg consumption per month Reliance Jio has reported revenue of Rs 7,213 cr and an operating profit of Rs 261 cr for the second quarter of the financial year.Per capita data consumption was 9.62 GB per user per month.Average voice consumption was 626 minutes per month during the period, it added. ...
BSNL to increase minimum broadband speed to withstand Jio Fiber Existing BSNL plansState-owned telecom provider Bharat Sanchar Nigam Ltd will increase the speed cap on all its DSL and Fiber broadband plans to 10 Mbps. At present, most plans have a speed cap of 4 Mbps.However, higher speeds will be available only in areas which are re...
Tata Tele acquisition good for Bharti Airtel – Fitch Bharti Airtel Limited's (BBB-/Stable) announcement that it plans to acquire the consumer mobile operations of Tata Teleservices and Tata Teleservices (Maharashtra) Ltd (Tata Telecom business) is positive for the deal participants as well as the industry, Fitch Ratings said....
Reliance Jio quarterly numbers to be announced today; new tariff plans eyed Reliance Industries, the parent of telecom operator Jio, will announce its quarterly performance numbers at around 5 pm today.Besides its core oil and gas business, the company will give an update on the operations of its telecom unit.Some in the market even expect it t...
Tata Teleservices to merge mobile business with Bharti Airtel Bharti Airtel Limited, India’s largest telecommunications services provider and Tata, India’s leading conglomerate, today announced that they have entered into an understanding to merge Consumer Mobile Businesses (CMB) of TTSL and TTML into Bharti Airtel.The move is likely ...
Reliance Jio to launch new plans on Thursday, offers 100% cashback Reliance Jio, India's most popular wireless data provider, said it will introduce new plans from Oct 19, and that it was offering "100%" cashback on its popular recharge of Rs 399 that gives three months of services.In a promotion put up on its website, the company said the ...
Airtel counters JioPhone with smartphone at Rs 1,399 net price Bharti Airtel has announced a scheme to offer a 4-inch smartphone at an effective price of Rs 1,399 -- after cash backs -- to take on the challenge posed by Reliance Jio's Jiophone.The customer needs to make a down payment of Rs 2899 for the 4G smartphone. He will get a cash...
Idea, Airtel offer 84 GB 4g data for Rs 400 to target users Airtel PlansIdea Cellular and Bharti Airtel are offering 1 GB of 3G or 4G data per day for 84 days at a price of around Rs 400 in select circles, including voice benefits, matching Jio's lowest tariff.The offer is available only for targeted users.For example, for so...
To arrest subscriber decline, Idea offers 84 GB, on-net calls for 230 rupees Idea Cellular, the third largest telecom operator in India by revenue, has started offering new customers 84 GB and free on-net calls for 84 days for just Rs 230 in the Kerala circle.Similar schemes are likely to have been launched in other circles as well.It also offers ...
Zain to use Wifi spectrum to speed up 4G LTE Nokia will help Saudi telecom operator Zain to use unlicensed spectrum in the 5 GHz band -- often used for Wifi -- to increase download speeds of 4G LTE."Following the trial, the Nokia technology will be deployed in hotspots, for example, in malls and cafes in Jeddah and aro...
Idea Cellular offers 28 GB 3G/4G data for Rs 250 Idea Cellular, which has been under pressure in recent months due to aggressive offerings from rivals Bharti Airtel and Reliance Jio, has unveiled a new promotional offer that gives 1 GB per day for 28 days at a price of around Rs 250.Unlike other plans, this one does not off...
RCom withdraws scheme for sale of tower co to Brookfield Reliance Communications said it has filed with the National Company Law Tribunal to withdraw its demerger scheme for its tower assets.The move follows the cancellation of its plans to merge with Aircel Cellular due to regulatory issues.The company Anil Ambani-led company...
After Aircel deal failure, RCom changes board composition Reliance Communications inducted its CEO and the president of its telecom business into its board of directors.Punit Garg, President, Telecom Business and Chief Financial Officer V Manikantan have been appointed as non-indepedent directors on the company board.The move c...
RCom likely to shut more 2G, 3G networks, sell the spectrum Reliance Communications, which announced it was abandoning plans to merge with Aircel Cellular, indicated that it would focus on two segments - 4G and wired. Within wired, it would focus on enterprise services.The disclosure indicates that the company, -- which recently shut ...
JIO IMPACT: India mobile data usage up 500%, price down 97% in 1 year The average data consumed by wireless users in India has increased five fold in the last year one year, even as prices crashed by 97% due to the launch of Reliance Jio.For India as a whole, the total consumption of wireless data touched 4.3 bln GB in the three months from Ap...
Idea Cellular expects 7-fold increase in data consumption in one year Idea Cellular, one of India's top telecom companies, is working with the assumption that its users will increase their data consumption from the present level of around 2.2 GB per month per head to 15 GB per month by next year, CEO Himanshu Kapania said."Idea is planning on ...
Reliance Jio, Vodafone & Airtel conducting pre-5G trials – ZTE All three of India's top mobile networks -- Bharti Airtel, Vodafone and Reliance Jio -- are currently conducting trials of a key 5G technology that makes use of a very high number of antennas to increase the capacity of the network, David An, the technology head of ZTE said toda...
Indian satellite broadband could become cheap next year as capacity doubles GSAT-19 | ISRO India is likely to see a massive increase in the amount of satellite broadband connectivity, including that for hand-held devices, over the coming months with the operationalization of three new satellites, AS Kiran Kumar, secretary to the department of space said...
Reliance Jio to tie-up with Den Networks for fiber launch? A day after Reliance Industries said it would not comment on media speculation about acquisition talks with Den Networks, the cable company has issued a largely identically worded statement. However, the statement seemed to indicate the possibility of a tie-up or agreement rathe...
Is Reliance Jio about to acquire Den Networks? Reliance Industries refused to deny or confirm media reports about its telecom unit Jio being in talks to acquire cable operator Den Networks.Shares of Den Networks, one of India's largest cable networks, are up 6.2%, having opened higher on the news."We are unable to co...