It is loud and clear. With Bharti Airtel reportedly being in talks to launch 4G smartphones, the battle has begun between the country’s major telecom operators.
It is loud and clear. With Sunil Mittal led Bharti Airtel reportedly being in talks to launch 4G smartphones, the battle has begun between the country’s major telecom operators. Financial Express had already set the prelude for the battle in its report on July 13 “It’s RJio vs Airtel”. It had said that “Come December and a new telecom operator will be born—Reliance Jio Infocomm—the telecom arm of Mukesh Ambani-led Reliance Industries. As always, there’s both apprehension and excitement that accompanies the entry of a new player; incumbent operators are full of trepidation while consumers can’t wait to see what’s in store.”
To take on Reliance Jio, Bharti Airtel is planning to launch a dual mode 4G phone in the range of Rs 4,000-Rs 12,000 by Oct-Nov, weeks before RJio’s plan to launch a 4G smartphone.
If reports are to be believed, Airtel is already in talks with Chinese vendors and Foxconn for 4G smartphones.
Mukesh Ambani, meanwhile, is entering the telecom realm for the second time after a decade. In 2003, Reliance launched mobile phones for Rs 500 giving a boost to telephone adoption in India.
Airtel has begun rolling out 4G services across the country in a phased manner.
We look at six crucial points on how telecom operators Reliance Jio and Bharti Airtel are gearing up to take on each other.
4G smartphones: Reliance Industries chairman Mukesh Ambani during company’s 41st annual general meeting last month had announced that the company would come out with 4G-enabled handsets with an entry price of below Rs 4,000. Media reports now suggest Bharti Airtel is in advance stage to finalise vendors to launch 4G smartphones.
Quality of the service: RJio service is set to score over incumbents as being a new entrant in 4G smartphone services, the network is expected to be less clogged than the top three players. RJio will try to cash on this.
Data and voice revenue: Data is expected to give RJio an edge over its competitors, mainly Bharti Airtel. Since the average revenue per minute (ARPM) for voice is decreasing while that for data is on the rise, any cut in data tariffs by RJio would impact the stronger incumbent operators like Bharti, Vodafone and Idea. That might be true, but analysts maintain that such tariff cuts would be accompanied by elasticity in usage leading to an increase in per user metrics and faster penetration which would moderate the impact of RJio’s launch.
4. There are expectations that the Bharti Airtel handset will come with long term bundled plan. but not locked only to the Airtel network. Reports said that it will support both FDD and TDD LTE network. This will let customers to stay to Airtel’s its network.
5. If Reliance Jio’s 4G-enabled handsets offer voice and data services at Rs 300-500 per month, there will be a serious challenge to the incumbents who have been operating in stable tariff regime for the last couple of years.
6. According to the head of big telecom firm, the only real challenge which RJio could pose for incumbents is a low tariff. Incumbents are readying themselves for a price war, prepared to take a hit on the profit & loss (P&L) account but are confident their strong balance sheets will help them weather the storm.