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Reliance Jio 4G launch date is NOT postponed by Mukesh Ambani in CNN interview

mukesh-ambani-reliance-jio-launch-date
screengrab of the CNN interview

Sometimes, even the best can get it wrong, and it looks like that’s what happened in the case of ‘Mukesh Ambani says Reliance Jio to launch in second half’ story.

Across publications, everyone is reporting that Ambani postponed the launch date of what is touted to be India’s biggest 4G service to the second half of this year. But that is not true, if you go by the transcript of the interview put out by Firstpost.com.

First, let’s see what different publications are reporting:

“We’ll be ready to launch in the second half of 2016. Eighty percent of India’s population will have high-speed mobile broadband Internet. So, 80% of the 1.3 billion Indians will have high-speed, mobile Internet. And by 2017, and we would cover 90%. And, by 2018, all of India would be covered by this digital infrastructure.”

But the transcript of Mukesh Ambani’s interview, given on Firstpost website gives a different picture. In it, he says:

“Well, we are ready to launch and in the second half of 2016, 80% of India’s population will have high speed mobile broadband internet – so 80 % of the 1.3 billion Indians will have high speed mobile internet. By 2017 end, we will cover 90% and by 2018 all of India would be covered by this (Jio) digital infrastructure.”

Of course, the difference is only in a few words here and there and in the punctuation and so on, but it makes a lot of difference if you are trying to gauge the launch date of Reliance Jio.

Specifically, while most publications are reporting that Ambani said “We’ll be ready to launch in the second half of 2016,” Firstpost.com — which is owned by Ambani’s Reliance Industries, is reporting the sentence as “Well, we are ready to launch and in the second half of 2016, 80% of India’s population will have high speed mobile broadband internet.”

The two, of course, don’t mean the same thing. The first is clear affirmation that the launch will happen in the second half, and that is indeed what everyone is reporting, while the second says that Jio is ready to launch, and goes on to give coverage milestones.

Typically, telecom companies give coverage milestones such as “X% by 12 months, Y% by 2 years” and so on, and it looks like Ambani was saying that coverage will be increased to 80% of the population by the second half of the year and 90% by next year.

It is, of course, possible that Reliance Jio is indeed pushing the 4G launch date to the second half, but such an affirmation cannot be made purely on the basis of this sentence.

MORALE ISSUE

Any further delay in the already much-delayed project would be a setback — both for employees of the firm as well as eager customers.

Going by our on-the-ground reports, such a delay is not on the cards, and the launch date target continues to be “sometime in March/April” as it has been for the last couple of months.

Not surprisingly, reports that the operator was delaying the launch even further have led to sharp reactions on social media, with many eager consumers turning to humor to hide their disappointment. One person said the company is waiting for 5G technology to mature before starting its services.

WHY DELAY IS UNLIKELY

Besides our on-the-ground feelers, there are many other reasons why a delay is unlikely.

First, Reliance Retail has already imported millions, perhaps even 1 crore, handsets for sale when the service starts. And they are not selling them aggressively yet.

If the company delays the launch by six months, the handsets will become outdated, though not unsaleable. They will require huge discounts to see any market momentum.

At an average cost of Rs 9,000, 10 mln handsets requires an investment of Rs 9,000 cr.

The second factor is competition. One of the biggest advantages that any start-up has over established players is the radically different way it approaches the market. This includes the way it structures its costs and business operations, the kind of services it offers and often the prices at which it does so.

Over the last two years — and largely thanks to Jio’s own disclosures, much of the information about how the operator plans to disrupt the market is already out. This includes its plans for cut-throat pricing, its strategy of offering multimedia content and not just a pipe, extreme scale and the reach of its network and so on.

Over the last six months, RJio’s competitors have started copying much of the company’s strategy.

For example, in April last year, when Idea officials were asked if the company would roll out 4G before March 2016, the company said that they were not planning to make any meaningful investments in the technology before March.

“Meaningful capex , if you were to use the word for 4G launch , which i s the correct word to use, the answer is No. We will do POC (proof of concept).”

However, with Jio threatening their market shares, all of its big rivals including Idea have already launched 4G services in a big way. In fact, Idea is ramping so fast that it may become the biggest 4G operator by June, when it plans to have 750 cities covered by the service.

Similarly, these operators are moving fast to offer their own video services and other value-adds in an effort not to be caught unawares by Jio. Airtel announced its project leap, seen as a response to the RJio threat, to upgrade its network.

In fact, the company announced last week that it had moved its network from 4G to 4G+ in Kerala. 4G+ networks support handsets such as Redmi Note 3, which come with Category 6 LTE that offers more stable and often faster data throughput.

Similarly, Idea, Vodafone and Bharti are busy swapping their old fixed-technology base stations for flexible ones that can allow them to switch their network from 2G to 3G and from 3G to 4G at a later date with the ‘flick of a switch’ at their network control centers.

According to our sources, Jio is more likely to go for a limited launch instead of postponing the starting of its service to the second half. There are already reports that the first phase of launch would be done in 13 cities.

To read the full transcript, head to Firstpost.com.
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