Mobile data will log a compound annual growth rate of 18 percent between
now and 2020, increasing its revenue share from the current 18 percent
to 31 percent, says a Citi Research report.
Looking at the data
consumption upswing in the country, vis-a-vis revenue from the
traditional voice telephony, the report says the latter's revenues will
grow only at 3 percent annually. Overall, the revenue growth for the
industry is forecast at 6 percent per annum.
The data growth, says
the report, is "in part thanks to Jio making the service more
affordable (handsets and tariffs)." As announced by the company earlier,
Reliance Jio is to launch its 4G services in India by December this
year.
"Like any new entrant, Jio will eat into the revenue market
share of the incumbents, especially the weaker players. Jio will offer
both voice and data, but its market-share gains would likely be more
significant in data than voice given the trend in the sector," it says.
The
report says with relatively inferior spectrum and long term evolution
(LTE) delays, Idea will lose the most. "Infratel (Bharti Infratel), in
contrast, looks best positioned to ride the data wave. For Airtel,
market-share impact could be the least given its best-in-class
spectrum."
It says incumbents will need higher capex not only to
counter Jio's superior spectrum, but also to expand 3G or 4G networks.
"Anecdotal evidence shows Airtel's 4G coverage is patchy."
Bharti
Airtel that had launched 4G network in Kolkata in April 2012, has by now
rolled out 4G in almost 350 towns and cities in India.
"The
regional threat of new entrants disrupting competition could play out in
India as well with the impending entry of Reliance subsidiary Jio," the
report says, adding: "We expect Jio, with its heavy investments and
superior LTE-related spectrum, to restrict incumbents' growth."
As
regards Reliance Communications (R-Com), the report feels it could
end-up trading its spectrum with Reliance Jio, as opposed to sharing,
"While
R-Com's spectrum could be used in multiple ways - sharing, merger and
acquisition or trading - we believe trading would likely be the
preferred route," it says. "Sharing would not help increase 800MHz
footprint. Jio would not get much benefit as it too needs 800MHz in the
same band for sharing with R-Com."
