13.6.15

Reliance Jio update



Reliance Jio Infocomm, owned by billionaire Mukesh Ambani, will make its long awaited commercial launch of highspeed broadband services in December, more than five years after re-entering the telecom sector. The move could dramatically alter the industry landscape in the world's fastest-growing major economy, experts said.
Ambani unveiled details of Jio's fourth-generation (4G) services on Friday at the 41st annual general meeting of parent Reliance Industries Ltd (RIL). The company will offer data and voice services at half or less than half the current rates. The offerings will include instant messaging, live TV , movies on demand, news, streaming music and a digital payments platform, said the RIL chairman.
“I am confident that Jio will play a significant role in lifting India from its current 142nd rank on Internet penetration to among the top 10 nations in the world,“ Ambani said.“Digital currency, digital commerce, digital education, digital healthcare, e governance, M2M and the Internet of Things, smart cities ...I won't be exaggerating if I say that each of these areas is ripe for hundreds of thousands of entrepreneurial ventures.“ Jio, wholly owned by RIL, has already launched instant messaging application Jio Chat and will launch apps in education and healthcare sectors. It will also offer MiFi (mobile WiFi) hotspot devices, traditional WiFi devices and set-top boxes. The company has also applied for permits to enter the broadcast distribution business.
This is “one of the largest transformational green-field digital initiatives anywhere in the world,“ Ambani told shareholders. “Jio's broadband assets will be the bedrock for Digital India,“ he said, referring to Prime Minister Narendra Modi's push to bring government services fully online. “This is a key theme for transforming our nation and creating opportunities for all citizens by harnessing digital technologies,“ Ambani said.
Over the next few months, Jio will start an extensive beta launch, which will be upgraded to commercial operations by the year end. The fiscal year starting April 2016 will be the first full year of commercial operations for Jio, which expects to achieve 100% coverage over the next three years, Ambani said.
Jio is now present in all states, with a direct physical presence in nearly 18,000 cities and towns. “We are expanding this footprint to cover nearly 80% of India's population by the end of this year,“ Ambani said.
“In our digital business, our plan is to provide the same power of computing, communication and information to every individual, whether in towns or rural areas, that the US president had (provided) 10 to 15 years ago. All this at about Rs.300 to Rs.500 per month,“ the RIL chairman said.
This could be disruptive in a market marked by intense competition.
Some point to Jio's heavy investment and the technological deficiencies of its bandwidth holdings, especially in the 2300 Mhz band, as reasons for optimism on the part of the incumbents. Jio has already spent Rs.34,000 crore on buying airwaves out of Rs.70,000-crore investment it planned.
RIL re-entered the telecom sector in 2010 by buying the only company that had won panIndia 4G spectrum in an auction. The telecom business, since named Reliance Jio Infocomm, has been unable to launch services all this while mainly due to the technology standard that it had adopted, TDD-LTE, is still being developed globally . Expensive devices are also a big deterrent. Market leader Bharti Airtel's 4G services on a similar standard haven't met with much success yet.
Jio's optimism on coverage though is backed by its expectation that India will see a number of 4G-LTE handsets at below Rs.4,000 by the year end. It has been working with device makers, including Samsung, to make affordable devices and make them available widely . Industry experts said the inflection point for wider 4G adoption will be devices at Rs.3,000 or less.
Customer acquisition will be Jio's biggest challenge as it appears to be primarily focusing on data, said Jaideep Ghosh, partner, management consulting, KPMG, in India. “Unless they are able to bring much more to the table, both on the voice and data fronts, compared to what incumbents currently offer, it will be very difficult for Jio to wean away customers from India's top three mobile carriers,“ he said. “A data-dominant 4G services strategy is unlikely to translate into rich customers pickings in a market where voice remains the prime revenue driver,“ said Ghosh. A potential deployment of voice over LTE services (VoLTE) in India over 2300 Mhz is also fraught with risks as this hasn't been successfully deployed worldwide, he added.
Falling back on its 1800 Mhz bandwidth won't resolve the problem by much as Jio holds the spectrum in 14 of India's 22 circles, of which six were bought in March and haven't been allotted so far.


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