4G

The unveiling of 4G smartphones and rolling out 4G services in India will lead to cross a benchmark of 18 crore 4G smartphone users in India by 2018. Bank of America Merrill Lynch (BofA ML) revealed the fact in a report, which states that the Indian 4G network will be crowded up to nine crores of 4G subscribers with 18 crores of 4G handsets.

The report further said that the assumptions will be totally dependent on Reliance Jio Infocomm. It also states that if the telco delays the launch then Bharti Airtel, Vodafone and Idea Cellular will gain the respective subscribers from this growth.

“We expect 4G smartphone base to jump from 5 million in FY 2015 to 180 million (18 crore) by FY 2018, leading to 4G subscribers accelerating from almost zero in FY 2016 to 90 million (9 crore) by FY 2018,” Sachin Salgaonkar, Karan Parmanandka, and Simon Dong-je Woo, BoFA ML research analysts said in their report.

Commenting on the current 2G and 3G subscription charges, Salgaonkar said that they can expect a marginal difference in the 3G and 4G data charges in future. Also, it is assumed that for the abrupt change in the bandwidth and above mentioned reasons, current 2G users will directly switch their services to 4G.

Explaining the analysis, he further added, “With all the big 3 telcos expected to have rolled out 4G selectively in key urban areas before March, 2016 we expect their top-end (high usage) consumers to migrate to 4G. This, in our view, will make it difficult for Jio to poach these subscribers as the company would need to focus on offering a differentiated service.”

Currently, we have no updates from Reliance Jio for the roll-out of its 4G services, other than Mukesh Ambani’s commitment, which includes that the firm will be launching its 4G services throughout the country by the end of this year.

By comparing the currently available plans to the top of the line players, Idea, Vodafone, Airtel, it is also expected from the company will offer the high-speed Internet services at very cheap rates. According to the estimations by the analysts, lower price strategy will make Reliance Jio, the market leader followed by big three telcos, in terms of 4G subscriber base from 2017 onwards till 2025.

“The company (Jio) is looking for 4G phones to be priced between Rs 4,000-25,000. Jio would need a 5 band phone which works on 900, 2100 bands along with 800, 1800 and 2300 for seamless connectivity,” the report said.