Waiting For Godot
Are we? Reliance Jio’s launch of 4G services is long awaited now. So long that the delay is beginging to threaten its expected success
There is a particularly funny forward doing the rounds on the popular messaging app WhatsApp nowadays. Hypothetically comparing the scenario in the year 2020, it says that in another six years Airtel would be boasting of having the widest 5G network; Vodafone would be talking about the fastest 5G network and Reliance Jio would have distributed 4G SIMs to employees still in testing phase with the promise of going live soon!
Though it is hardly meant to be taken seriously it is a telling sign of the changing market perception. Till some back Reliance Jio Infocomm’s entry was keenly awaited and was seen as a disruptive move, which would forever change the dynamics of the country’s communications industry.
The disruptive capability of a startup of the magnitude and scale of RJio is not in doubt but inordinate delays have somewhat reduced the lustre of the forthcoming launch of RJio’s 4G services. It is not without reason. The network has been in the making for almost six years now. RJio procured pan-India 2300Mhz spectrum way back in 2010. Lack of 4G ecosystem and immature technology were major problem areas and were leading to delay in launch. Arguably, RJio found itself in a unique and somewhat challenging position. No other Indian telecom service provider had ever been at the forefront of deployment of a new technology, which comes with its own set of challenges. The never-ending cycle of conducting tests and trials predictably took a long time.
Besides, setting up a network the size of RJio was bound to be a time-consuming activity.
“Four-G deployment and launch is a complex activity for any telco. Considering RJio is a new player in this space, it is taking more time than anticipated in resolving technical issues,” says Amresh Nandan, research director, Communication Services Provider Research, Gartner.
Time To Walk The Talk
However, any delay now in the launch of services is detrimental to RJio’s cause as it is helping the incumbents to gain huge grounds in the developing 4G market.
“With this delay, they are definitely giving advantage to their competitors. We see competitors intensifying their marketing activities for customer acquisition on 4G networks,” adds Nandan.
While RJio was busy setting up network and conducting trials, it seems to have lost the spectrum as well the first-mover advantage. And now, it would also have to fight the market perception. Consumers are increasingly wary of never-ending delays. The worst one to hit the company is the launch of services only for employees in 2015. Chairman of Reliance Industries MukeshAmbani had mentioned in the Annual General Meeting that the company would be launching later in 2015. The market expectation was also high, leading to Airtel announcing the $9-billion worth Project Leap for network transformation. Anticipating RJio’s launch, Vodafone and Idea also preponed their launch plans.
RJio had a clear advantage with pan-India 2300Mhz spectrum in 2010 and it added to it by procuring spectrum in 800Mhz and 1800Mhz frequency bands in the subsequent spectrum auctions. However, Airtel negated this advantage by acquiring Augere Wireless, Qualcomm, Videocon and Aircel’s spectrum in the last one year to have a pan-India LTE spectrum. The service provider was the first telco to launch 4G services way back in 2012 and today has presence in more than 300 towns and cities.
Besides Airtel, other telcos such as Vodafone India and Idea Cellular have also been ramping up their 4G presence. While Idea’s 4G is now present in more than 100 towns and cities, Vodafone has 4G network in five circles.
Because of incumbents’ increasing presence in the 4G network, it is now imperative that RJio’s services are at least on par with them if not superior. And exactly this is believed to be the key reason for the delay. The company wants to be absolutely certain that the services are topnotch and second to none. RJio is leaving no stone unturned to offer the best-in-class services. With around 75,000 towers and more than 250,000 km of fibre, RJio has one of the best infrastructure in the country, even before it has sold a single SIM. However, being a greenfield operator the company is definitely likely to face a few teething problems.
“Deployment of 4G by Airtel and other incumbents has created a comparative view of the market for RJio’s customers. Thanks to campaigns by incumbents, one has a fair idea of what to expect from 4G. This would be beneficial for Reliance Jio, since it would not need to create as much awareness about 4G as it would have been required if it was the first one to launch 4G services in the country,” says Deepak Kumar, analyst founder, BusinessandMarket.
Even if the network is one of the best, it is going to face a humongous VoLTE challenge.
“VoLTE is a good use case. However, it is yet to be seen if VoLTE can be used by Reliance Jio as a differentiating factor. It requires far greater service assurance than normal data services. In addition, customers now are as much conscious of quality of data services as voice,” says Nandan.
At the same time, RJio also stands to gain by 4G expansion of the incumbents. To begin with, the incumbents’ brand campaigns on 4G network might be advantageous to RJio, which might not need to spend a huge amount on creating awareness about 4G.
The launch and expansion of 4G network of incumbents may also lead to creating momentum around devices. Earlier this year, RJio launched a devices brand, LYF, to create an ecosystem for Voice over LTE (VoLTE). But the delay is leading to issues with device specifications and uptake of the devices. Since the network is yet to be launched, customers are reluctant to purchase LYF products. Besides, further the delay, more the chances of specifications becoming outdated, leading to slow uptake of devices.
Apart from VoLTE, the company has been focusing on applications and content as well. It plans to have an extensive apps ecosystem, which is currently not the focus of the incumbents, who are emphasising only on network expansion.
“Reliance Jio’s focus on content and apps could be tied to its overall data monetisation strategy, wherein it should be able to make simple Internet connectivity really economical. Others are moving cautiously because even though quad-play has been a great success in developed markets, Indian telcos are yet to experiment with it in India,” says Nandan.
RJio needs to launch at the earliest to capture a bigger share of the 4G market in the country otherwise it might be tough to regain the lost ground.
[email protected], @gagandeepjourno
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