Bharti Airtel Chairman Sunil Mittal feels that Reliance Industries Chairman Mukesh Ambani will shake up Indian telecom industry, Bloomberg reports.
Mukesh Ambani’s Reliance Jio Infocomm is spending nearly $15 billion for its 4G LTE services across the country. The Mumbai-based company has already kicked off Jio Wi-Fi services in select sporting venues offering high quality broadband services. Some reports say Reliance Industries will be spending $20 billion for the 4G venture.
For comparison, Vodafone India has made an investment of Rs 111,000 crore or $16.8 billion in the country since entry in 2007. Recently, it announced an additional investment of Rs 13,000 crore for capacity augmentation and new business initiatives.
Sunil Mittal says Reliance Jio is set to force smaller telecom network operators to consolidate. Some of the small telecom operators include Aircel, Telenor, Videocon Telecom, Reliance Communications and Tata Docomo.
Big players include Bharti Airtel, Idea Cellular and Vodafone. BSNL and MTNL are the two operators owned by the Government. Reliance Communications, promoted by Mukesh Ambani’s brother Anil Ambani, is set to purchase MTS India from Sistema of Russia and its Indian partners. Sunil Mittal says there will be only 4 to 5 telecom players in India.
CHALLENGES FOR SUNIL MITTAL
# Reliance Jio is making large scale investment in 4G
# Reliance Jio will launch 4G at highly competitive prices
# Reliance Jio will force consolidation in India
# Reliance Jio forecast to be #1 in Indian LTE market
# Airtel has spectrum cap issues
# Airtel needs to focus on acquiring spectrum
# Airtel has 4G presence in 330 towns
# Airtel’s African biz did not bring desired result
Also read: Sunil Mittel’s full Bloomberg article
Most of the recent analyst reports predicted that Reliance Jio Infocomm, though late to enter the 4G market, will become a dominant player. Despite the planned entry of Reliance Jio, Vodafone, Idea Cellular and Bharti Airtel have 4G plans ready. Airtel is already present in 330 towns. Vodafone plans 4G in 5 circles. Idea Cellular wants to cover 600 towns in H1 2016 with its 4G.
Vodafone India CEO Sunil Sood recently admitted that its 4G foray will be limited to main towns in five important circles due to lack of availability of cost effective 4G smartphones. On the other hand, Reliance Jio Infocomm is planning a nationwide launch in phases. Its first commercial launch is expected in the second quarter of 2016 though it received BWA spectrum in 2011. Samsung is one of the key telecom infrastructure partners for Reliance Jio.
Sunil Mittal admitted that Reliance does everything on a scale making it big and impactful.
“That is exactly what Reliance is planning to do in the telecommunication sector. From what we hear the launch will be imminent in the coming 30, 60, 90 days. India has 10, 11 operators. We should have about four or five at the very most,” said Mittal said on Sunday in the coastal Turkish city of Antalya.
Bharti Airtel has ramped up investment and is looking for opportunities to purchase spectrum from other companies.
Bharti Airtel is investing $3.5 billion in the year through March 2016, about $750 million more than usual, to spur the company’s 4G plans, Mittal said.
Mukesh Ambani’s Jio is expected to push for faster adoption of the high-speed data technology with competitive pricing. Though Airtel is offering 4G at 3G prices, the recent telecom analysis report from Nokia Networks found that there is poor adoption of 4G in India.
Mittal said Bharti Airtel is open to acquiring assets and spectrum.
The biggest challenge for Bharti Airtel, the No. 1 telecom operator in India, is competition norms and spectrum caps. “There are some opportunities in the area of acquiring spectrum. That’s the only focus that we have currently,” Mittal said.
Bharti Airtel will approach the India government to relax some spectrum sharing guidelines. Indian regulators recently allowed operators to trade airwaves.
Mittal said Bharti Airtel wants network sharing, not just spectrum sharing.
Baburajan K
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