Will RJio’s 4G Take-off in a Big Way in 2015?
It is difficult to discuss telecom trends in the coming year and not talk about much anticipated 4G launch by Reliance Jio. The only pan-India owner of 2300 Mhz spectrum it is believed that the launch will give the much-needed impetus to not just 4G technology but also to the mobile broadband revolution in the country.
Reliance Industries’ Chairman, Mukesh Ambani announced earlier this year that the company would be launching operations in 2015, five years after it acquired Broadband Wireless Access (BWA) spectrum in 2010. With Reliance’s history it cannot be just another launch. The company is credited with bringing down the tariffs by launching Monsoon Hungama offer in 2003. Experts believe that launch by Reliance cannot be just another launch.
The recent media reports suggest that the company will launch services in 800 cities and will offer only 4G dongles and mi-fi devices initially.
“It has to be disruptive in terms of pricing or offering to the consumer. It is important from two perspectives: network technology, and secondly from content. It is clearly at top of mind of the telcos in the country. They have to upgrade the technology and then they have to think of how to present (like how to bundle the services; how to move the customers from 3G to 4G etc.,) the technology to the customers,” says Kamlesh Bhatia, Research Director, Gartner India.
The take-off of 4G by Reliance Jio will depend on various factors. First and foremost, it depends on the telco’s service offering: home broadband or mobile. “Adoption of 4G as a home broadband solution may take off quickly because of latent demand for home broadband and limited availability of wireline broadband options,” says Rohan Dhamija, Partner, Head - India & South Asia, Analysys Mason.
However, 4G on mobile will largely depend on the service provider’s ability to provide ubiquitous network coverage. The company owns 2300 Mhz which means that it will face issue with in-building access. It would definitely require a large number of sites and this explains the tower tie-ups the company has formed over the last two years. Viom, Bharti Airtel, BSNL and Reliance Communications are some of the companies RJio has tied-up for tower access. The company has also built its own 30,000 towers across the country.
The second major issue for the company is, of course, devices. Reliance Jio is believed to be checking devices with a few devices manufacturers like Micromax. Initially, Reliance Jio had spectrum in 2300 Mhz band which means that TDD version would be deployed and that is where the devices problem is. The options of LTE devices have remained limited. However, the coming year is likely to change all that.
“The number of 4G enabled devices currently available in the market is very less, it will take some time (a year or so) before we can see significant adoption of 4G services on mobile,” says Dhamija.
The coming year might continue to be about fixed broadband (dongles and Wifi) where 4G is concerned since the prices of the devices continue to remain a problem.
“4G devices are likely to become cheaper in the coming year. Handset OEMs have already started offering cheaper 4G enabled handsets (e. g. Xiaomi’s 4G enabled smartphone at Rs 9,999). However, availability of devices affordable for the mass market will depend on the development of LTE ecosystem (TDD-2300 and FDD-1800) globally,” says Dhamija of Analsys Mason.
However, Reliance Jio would have to face stiff competition from 3G operators in the country, who are slowly but steadily expanding their network in the country.
“3G will drive mobile broadband in India for the next three-to-five years. In the next two-to-three years wireless broadband offered using technologies like TDD LTE/WiMax are not expected to takeoff on a large scale due to limitations related to voice over LTE, cost of access devices and low business case for wider rollout,” says the recently released Price Waterhouse Coopers report.
It remains to be seen how Reliance Jio cracks the 4G market in 2015.