Reliance Jio launch date not pushed back — analyst; phased launch likely

reliance-jio-lyf-launch-offerThe launch of Reliance Jio’s 4G service is not being postponed, an analyst report said quoting a company insider, adding the company is likely to go for a phased roll out.

“.. a recent company insider has mentioned that Jio launch is not being postponed and that there was a misquote. While we believe that few months of delay would not materially derail Jio’s proposition to consumers we think that the network is ready and working fine,” the report said.

Many media outlets, including Press Trust of India — India’s biggest wire agency — reported three weeks ago that Reliance Jio’s 4G launch was being pushed back to the second half of this year from the estimated date of March/April.

The agency, and subsequent media reports, sourced the news to an interview conducted by CNN with Mukesh Ambani, chairman of the company. However, a subsequent examination of the transcript of the interview allayed much of the concerns.

“We think that the company would have a circle-by-circle launch rather than a pan India launch as it would be easier to optimize the network quality on a small-scale basis rather than a large-scale.”

In fact, Jio now has 1.2 lakh cell sites — more than BSNL and nearly double of RCom and Aircel. Despite this, the analyst report said, it was possible for the company to delay the roll out if it felt that the network was not up to the mark.

“A not-upto-the-mark network quality may lead to a six month delay in our view… We believe that Jio brand has only one chance to create an impact in the market as an aspirational brand, where consumers would be willing to pay a premium to access good quality service.”

However, it added: “Our checks indicate that Jio network quality is fine with the company being able to offer consistent 10-15 Mbps speeds except for Rural Areas and Outskirts of Cities.”

Another possible reason for a delay would be if the company wants to integrate the high-penetration spectrum that it purchased from the Anil Ambani group a month ago.

Reliance Jio has already started radiating on the RCom spectrum on a test basis in many cities. However, said the report, a total integration right from the beginning would entail some delay.

“A six month delay from this point may be possible if Jio intends to have an overlay of 850 MHz in most of the circles by using RCOM’s spectrum.”

The analyst report also expects the company to get more aggressive as far as handset sales are concerned in coming weeks.

Jio has stocked millions of LYF handsets, and is even launching LYF 4K TVs, but is yet to start aggressively selling them. The cheapest phone under the LYF brand is priced at Rs 4,999. It is also offering Holi discounts on these devices.

“While 4G smartphones sales are picking up in India, these phones only have 1800/2300 MHz and do not support VoLTE,” the report said. We estimate less than 15% of 4G smartphones currently sold in India support 850 MHz & VoLTE. We expect Jio will distribute and launch more LYF branded phones in coming months to overcome the ecosystem disadvantage.