The Mukesh Ambani-promoted Reliance Jio Infocomm, which has delayed its 4G launch to early next financial year from December this year, will lead the 4G subscriber market share despite the 4G network launch by Vodafone, Idea Cellular and Bharti Airtel.
The report also said 4G smartphone base will jump from 5 million in 2015-16 to 180 million by 2017-18. Recently, e-commerce portal Flipkart noted that there is huge demand for 4G smartphone from both top and small towns across the country.
HIGHLIGHT OF 4G REPORT
# Reliance Jio to lead 4G market in India
# Reliance Jio to miss first move advantage
# Sticky users will not move to Reliance Jio
# Airtel, Idea, Vodafone to have 60% share by 2019-20
# India will have 90 mn 4G subscribers
# India will have 180 mn 4G smartphones
# 4G net adds will be faster 3G net adds by 2018-19
Bank of America Merrill Lynch said there will be a faster acceleration towards 4G LTE. A large proportion of 2G subs will be leapfrogging 3G and moving to 4G. “We expect 4G smartphone base to jump from 5 million in 2015-16 to 180 million by 2017-18 leading to 4G subscribers accelerating from almost zero in 2015-16 to 90 million by 2017-18,” the report said on Saturday.
“We expect 4G net adds to be faster than 3G net adds by 2018-19 and estimate 3G subs to be largely restricted in areas where 4G coverage is limited,” it added.
With Reliance Jio Infcomm’s launch expected to be in March 2016 or later, it is believed that the big three telecom network operator — Bharti Airtel, Vodafone India and Idea Cellular – will have a head-start in 4G and also have incumbency advantage.
The telecom report said that continued delay from Reliance Jio Infocomm will make it difficult for Jio to poach more high-end subscribers as the company would need to focus on offering a differentiated service as aggressive pricing alone would not be able to help Jio have a sustainable advantage.
The top 5 percent customers of big three telecom network operators, who contribute to 25 percent of revenues, will be sticky and unlikely to switch now with 4G being offered by their existing telecom operator.
The report estimates the big 3 telecom operators’ 4G market share will increase from 53 percent in 2016-17 to 60 percent by 2019-20 though Reliance Jio Infocomm will have the largest subscriber market share in 4G.
Reliance Jio Infocomm will have close to 40 percent share in the Indian 4G subscriber market by 2019-2020.