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Reliance Jio's 4G to change telecom landscape

Mukesh Ambani's telecom venture gears up to launch 4G after five years of acquiring licence

Mansi Taneja  |  New Delhi 

Reliance Jio, Mukesh Ambani, Shah Rukh Khan, 4G
Reliance Industries Limited Chairman and Managing Director Mukesh Ambani with actor Shahrukh Khan at the launch of Reliance Jio's 4G services for its employees in Mumbai. Photo: PTI

The landscape of Indian telecom industry is set to change in the next couple of months with Reliance Jio (RJio) geared up for the commercial launch of its 4G services, after five years of acquiring the licence.

RJio, run by Mukesh Ambani, has been acquiring spectrum in other bands since 2010 when it first got 20 MHz each of 2,300 MHz in 22 circles. The company’s 4G services have been delayed because of various reasons such as 2,300 MHz not an ideal band for the launch owing to penetration in indoors and coverage issues. Though, it has done a soft launch of the services in December last year.

Globally, most of the LTE/4G networks have been deployed on 1800 MHz band. Spectrum in bands including 700 MHz, 800 MHz and 1800 MHz are better compared to 2300 MHz.

Experts add 4G services launched on 2300 MHz would have had problems in network coverage inside homes and buildings. A lower frequency band is suitable for seamless data services, which is why RJio has been on spectrum acquisition spree in other bands including 800MHz and 1,800MHz and has been demanding early auctions of 700 MHz – so far not auctioned/available in India. Even if one sets up a network on 2300 MHz, one would need more installation of towers – which means more investment -- compared to what one would need on lower frequency bands.

Realising this, RJio acquired 1800 MHz band in 14 circles in 2014 and 850 Mhz in 10 circles in 2015.Around Rs 1 lakh crore of investments has gone into RJio till now.

On Monday, RJio entered into agreement with Anil Ambani’s Reliance Communications (RCom) for spectrum trading and sharing agreements for 800-850 Mhz spectrum, which boosted its spectrum holdings.

The 800-850 Mhz band offers good coverage indoors and provide seamless voice services through VoLTE.

The spectrum trading will happen in nine circles while spectrum sharing will be across 17 circles. As part of the strategic collaboration, a reciprocal intra circle roaming (ICR) arrangement will also be done between RJio and RCom. Besides, it is engaged in discussions with BSNL for an ICR arrangement.

This will enable RJio in offering seamless 4G services using LTE in 800 MHz, 1,800 MHz and 2300 MHz bands through an integrated ecosystem. This combined spectrum footprint across frequency bands provides significant network capacity and deep coverage, according to the company.

Besides, the ICR arrangements with RCom and BSNL will provide RJio with a fall back network, which means subscribers of RJio will fall back on the 2G/3G network of these firms in areas where there are network gaps or black patches offering users a seamless experience.

In an analyst note, J.P.Morgan said with the spectrum arrangement with RCom, most of the pieces of RJio’s telecom business are in place and spending has been done. “Given that RJio is close to commercial launch, we expect investor focus to shift from capex to opex and product offering. So far, the focus has been on debt, capex and capital expenditure, but should now shift to revenue and market share.”

Apart from the soft launch for employees and vendors, the company has launched WiFi hot spots across several locations through agreements with several state and local authorities. It is also looking to partner with various colleges and institutions across India to provide WiFi services and solutions.

RJio has positioned itself strongly by increasing its spectrum holdings in all the bands, compared to others such as Bharti Airtel, Vodafone and Idea Cellular, which have also started the launch of 4G services in various locations. Analysts expert the telecom market to disrupt once RJio officially enters the telecom space this April.

First Published: Tue, January 19 2016. 19:15 IST