Will India's Reliance Jio Infocomm Disrupt the 4G Market?

Will India's Reliance Jio Infocomm Disrupt the 4G Market?

Telecom analysts and research agencies predict that India’s Reliance Jio Infocomm will disrupt the Indian 4G market with innovative offers. Reliance has not yet officially announced the commercial launch of Jio, but the service is currently available as a limited preview only.

Reliance Jio

According to telecomlead, this is what analysts have to say on the Jio launch and the current state of the 4G market in India:

Bank of America Merrill Lynch: India could see a capacity war and not a price war. Jio could focus on offering more data at the same price rather than lowering average revenues per user.

UBS: We agree that the Reliance Jio launch has the potential to further disrupt mobile data tariffs, we think there is a high likelihood that the entry of Reliance Jio will also expand the size of the market significantly.

We believe that India’s mobile data market is likely to grow 8 times (to Rs 2,133 billion) by FY26, driving strong operating leverage.

Citi Research: With Reliance Jio’s commercial launch imminent, increase in data allowance to pre-empt the likely aggression by Jio wasn’t unexpected. Data network utilization for telcos is currently low and therefore we believe that telcos should be able to handle any spurt in usage.

Morgan Stanley: We expect Reliance Jio launch to be market disruptive leading to a price war. 1.5 million users on Jio’s network already account for impressive 20 per cent of data market volumes, though currently uncharged.

Credit Suisse: Our recent research showed Reliance Jio will be hitting the market with the largest network by capacity. The extension of Jio promo offer to Samsung phones is to be seen as a progression of the launch.

Credit Lyonnais Securities Asia: Reliance will also select Apple and HP handsets and more such announcements are likely as Jio completes testing. We expect higher acceptance of Jio among users of dual-sim 4G handsets.

HSBC Global Research: Instead of cutting tariffs, which, in our view, would have been clearly negative, telcos have increased data limits and attempted to drive both penetration and average revenue per user (ARPU). In our view, recent pricing auctions may have some marginal impact on data revenue growth in the near term, but in the medium term we see them having a positive impact on data revenue growth.

Kotak Institutional Equities: We believe the recent price cuts announced by Bharti Airtel and Idea Cellular on select data packs have two clear strategic intents — improving the price-value equation of higher usage, higher ARPU packs, and improving the price-value equation of the entry-level trial/sachet packs.


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