The telecom industry is abuzz with news that consumers who have been eagerly awaiting Reliance Jio services may have to
wait just a while longer. Although consumers may be disappointed with the lengthier wait, the news may ultimately benefit
them as it has triggered immense competition in the sector.
If the Business Standard report is to be believed the services of Reliance Jio will not roll out before December 2016, as
there are several blind spots that the company needs to fix,while it also waits for the network to be stabilized.
Benefit to Consumers
The aggressive and increased competition in the telecom arena is sure to bring down service costs considerably. As per the
reports
Jio
is expected to offer 35 GB of 4G data free for the first three months on purchase of its smartphones. As per the plan,
consumers will be able to enjoy 10 GB of data per month at 4G speed and unlimited data usage at the speed of 256 kbps.
HSBC Reports and 4G Entrants
The competition is expected to intensify further, and the HSBC reports say that the time is not far when the mobile data
might become free. The new 4G entrants might look to leverage intranet-based data offerings to capture the market. At
present, telecom companies are monetizing the data connectivity and only charge for usage of data.
The intranet will be used to offer free or cheap data. In a recent development, the telecom regulator suggested the rule
that prohibits differential pricing of data. It allows telecom players to rely on a B2B model by charging e-commerce
players and content providers a carriage fee and subsidizing the subscribers’ data services.
To enhance value proposition, telecom companies charge a fixed fee and integrate intranet with content and enhance the
subscriber value proposition. This approach allows the 4G entrants to ask for the fixed fee, which isn’t linked directly
to the usage of data to target the high and medium ARPU data users and churn the subscribers from the top incumbent.
As per HSBC’s report, the 4G entrants have an advantage of the data spectrum ownership, especially the 800 spectrum
holdings and its ability to offer better content deals. The telecom companies lack the strength regarding content, and
this gives the new 4G entrants an edge, in case they launch fast.
While the delayed launch of Reliance Jio may seem like a golden opportunity to new entrants, the company can easily turn
this in its favor by offering a sweet treat to make itsservices more attractive to consumers.
Will a 4G Connection Work on Any Smartphone
The success of 4G largely depends on the penetration of
4G handsets. At present, only 5% of mobile users use smartphones compatible with 4G. By the end of the
year, the figure is expected to rise to 10% - around 80 million users. This means that a delayed launch will also work in
favor of Reliance Jio.
To make use of 4G services consumers must own 4G-enabled handsets. A handset that can function at multiple frequencies is
one that is compatible with the 4G network. It is highly recommended to buy only VOLTE enabled 4G compatible handsets to
enjoy the benefits of 4G.
Summary
A delay in Reliance Jio 4G services might turn out to be a boon for consumers as new entrants struggle to gain a foothold
and compete.