Reliance Jio vs Airtel battle may still be sometime away: Mukesh Ambani is all set to return back into the telecom industry with the Reliance Jio Infocomm Ltd. It is going to take place in the next three to four months and the Reliance Jio is coming up with a record investment of $22 billion and that could limit it from the irrational price cuts. But the current market leader is the Bharti Airtel Ltd. and it could face a big challenge from the Reliance Jio and this battle may still be sometime away.
The Reliance Jio is more considered about the network quality and a few propositions like the exclusive content. But the Airtel is offering none the less the best quality and to face it, it has some time to prepare. The Reliance Jio is up with a large capital and there are more discussions among the investors about the outcome to meet up the value they invested and give profits. But a huge amount of capital will make the highest 4G spectrum for it and will provide large number of 4G sites, access to the biggest optical fiber network and the LTE technology and these are all the major advantages of it.
The Bank of America Merrill Lynch (BAMIL) has said that “We see the risk of a high competitive scenario around 6-9 months post Jio launch, as Jio may get aggressive once it realizes that the initial uptake is lower than its expectations”.
The BAMIL also added that “We see a larger possibility that Jio would reduce its minimum ARPU (average revenue per user) requirement from Rs.300-500 to around Rs.200. Such a move would end up giving Jio access to another 100 million target subs (subscribers). However, this would trigger price cuts from the incumbent telcos, as they would try to retain their subs from being poached away by Jio”.