Study claims that Reliance Jio's 4G services may threaten Airtel, Vodafone's market share

A study by a leading investment group has indeed brought to light how Reliance Jio’s 4G launch could affect the other players in the Indian market. The study conducted by CLSA claims that Reliance Jio Infocomm’s 4G launch could indeed pose problems for existing 4G providers like Bharti Airtel and Vodafone India’s market share. “As high-ARPU (average revenue per user) subscribers are likely to be early adopters of 4G, the two highest-ARPU operators are at a higher market share risk with new entrant Reliance Jio’s launch of 4G services,” CLSA shared in a note as reported by the Economic Times. What this means is that Reliance Jio with its carpet approach will create an impact by means of drawing in premium 4G adopters (users) from Airtel and Vodafone’s budding user base. The reasons for the same seem pretty much valid and oddly apply more to Vodafone than anyone else because of its move to go with limited 4G spectrum. Airtel on the other hand not only has comparable spectrum to Reliance Jio but has also launched its own 4G services, in the same markets meaning that there is less to fear about. So far Airtel has spread out its 4G offering in about 300 towns across India, while Vodafone just recently launched its 4G services in Kochi, Kerala with plans to expand to other metros shortly. According to the company’s research, the the top-five markets-Mumbai, Delhi, Kerala, Karnataka and Tamil Nadu have twice as much 3G penetration than the remaining 17 markets and this is what makes them so important. However CLSA did state that Reliance did have a daunting task ahead of its launch. “Even as we maintain that new entrant Reliance Jio will face the daunting tasks of convincing/bundling/subsidising 4G users to adopt new handsets in a 95% prepaid and a low-ARPU market (Rs 161/month), besides the consumer acceptance of a new brand/service/marketing, ground realities are also that top data subscribers are spread across fewer circles and possessed by select operators,” said CLSA. Disclaimer: Reliance Jio is owned by Reliance Industries Limited, that also owns Network18 which publishes Firstpost.com (tech2)