Reliance Jio has been grabbing headlines ever since it started the commencial trial of its services in Dec 2015. It finally announced the full commercial roll-out of its LTE services on 1 Sep 2016 during its AGM (Annual General Meeting). Long-Term Evolution (LTE) is a standard for high¬speed wireless communication for mobile phones and data terminals. Jio presented some highly disruptive offers including: the cheapest LTE data rates in the world; zero roaming; and free lifetime voice calling. The announcements were seen as sufficiently disruptive to wipe almost $2 bn from its competitors' shares.
The response on social media was strongly positive. Moreover, with the welcome offer providing users unlimited services until Dec 31, 2016, it seems likely that mobile number portability (MNP) will enable rapid subscriber migration to Reliance Jio. Jio also announced that it aimed to be one of the fastest ever operators to reach I 0,) mn subscribers — a landmark that only China Mobile has achieved until now.
Initial market response to Jio suggests it might achieve that milestone even faster than China Mobile, which took 14 months. Reports indicated Jio had already surpassed 5 mn users within its first week of launch with an activation run rate of half a mn per day. Assuming no slowdown in that run rate, which is plausible as it rolls the service out more widely, it is likely to achieve the target in 6-7 months. This will mean Jio will join the Chinese operators in entering the big league and push itself ahead of Verizon Wireless. Consumers will gain and so will the Internet start-up ecosystem.
From an India perspective, Bharti Airtel, with 51 months of LTE operations, has fewer than 7 mn LTE subscribers and ranks outside the top 50 worldwide in LTE subscriber rankings. Other big operators among the top 10 like AT&T, NTT Docomo and T-Mobile are unlikely to leapfrog to 100 mn users anytime soon due to saturated market dynamics in theif
countries of operation. 1
From all accounts, Reliance Jio be burning a lot of cash to conduct a sustained price war. Most experts aver that it will be a few years before Reliance Jio generates cash profits. Having invested Z1.5 lakh cr, interest burden itself shook theoretically be close to 215,000 cr. I will have to generate profits after servicing its debt. Currently, the healthy RIL balance sheet, with cash generated from oil, gas and petrochemical business, is funding the price war launched by Jio. The question is how long the RIL shareholder will subsidise Jio's "loss leadership" in the telecom business.
Some analysts say Reliance Jio can pull off a coup and sustain itself if if grabs 100 mn customers by end of 2017. But that is easier said than done because the total smartphone market is no more than 220 mn. Jio will have te grab nearly 50 per cent of this marker within a year. This seems like a tall order.
The response on social media was strongly positive. Moreover, with the welcome offer providing users unlimited services until Dec 31, 2016, it seems likely that mobile number portability (MNP) will enable rapid subscriber migration to Reliance Jio. Jio also announced that it aimed to be one of the fastest ever operators to reach I 0,) mn subscribers — a landmark that only China Mobile has achieved until now.
Initial market response to Jio suggests it might achieve that milestone even faster than China Mobile, which took 14 months. Reports indicated Jio had already surpassed 5 mn users within its first week of launch with an activation run rate of half a mn per day. Assuming no slowdown in that run rate, which is plausible as it rolls the service out more widely, it is likely to achieve the target in 6-7 months. This will mean Jio will join the Chinese operators in entering the big league and push itself ahead of Verizon Wireless. Consumers will gain and so will the Internet start-up ecosystem.
From an India perspective, Bharti Airtel, with 51 months of LTE operations, has fewer than 7 mn LTE subscribers and ranks outside the top 50 worldwide in LTE subscriber rankings. Other big operators among the top 10 like AT&T, NTT Docomo and T-Mobile are unlikely to leapfrog to 100 mn users anytime soon due to saturated market dynamics in theif
countries of operation. 1
From all accounts, Reliance Jio be burning a lot of cash to conduct a sustained price war. Most experts aver that it will be a few years before Reliance Jio generates cash profits. Having invested Z1.5 lakh cr, interest burden itself shook theoretically be close to 215,000 cr. I will have to generate profits after servicing its debt. Currently, the healthy RIL balance sheet, with cash generated from oil, gas and petrochemical business, is funding the price war launched by Jio. The question is how long the RIL shareholder will subsidise Jio's "loss leadership" in the telecom business.
Some analysts say Reliance Jio can pull off a coup and sustain itself if if grabs 100 mn customers by end of 2017. But that is easier said than done because the total smartphone market is no more than 220 mn. Jio will have te grab nearly 50 per cent of this marker within a year. This seems like a tall order.
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