Vodafone India was on the verge
of filing for IPO to recover its investment as well as to reduce mounting debt.
Reliance Jio service launched shattered their plan as Vodafone clearly
understand the impact of Jio tariff plan on their potential IPO offer price.
There are lots of apprehension in the market place about incumbent like Airtel,Vodafone or Ideacellular to ward off Reliance Jio competition.
Recently Airtel announced that they will invest around $9Bn to upgrade their network and Idea Cellular will
definitely get the support from the promoters in the form of equity infusion or
loan to go full fledged against Reliance Jio with aggressive price point.
As per the news reports Reliance
Jio initiated call drops are on the rise as incumbent has to provide more PoI
and that will take few weeks to be in place. Its universal truth that Reliance
group of companies most of the time use their petro finance to suppress
competitor and sometime throw them out of the market.
In case of Indian Telecom market
place, Reliance Jio is going to face stiff competition from incumbent operator
the way new entrant faced in 2012-2013 time frame. By embarking $3Bn fund
Vodafone sent out clear signal to industry player that they will be very
aggressive in acquiring required spectrum to cover all 4G circle. We should not
forget that Vodafone Plc the parent of Vodafone India is pioneer in 4G network
know how and time to time support Indian operation.
It is also expected that once the
concurrent userbase increases on Reliance Jio network then their partner from
ccc will face music to cater the traffic and there might be problem in
scenario 1 when the content hosted at partners end. On the other side, if
content is hosted at Reliance Jio data center then it will be incremental streaming
cost for Reliance Jio
The intention of Vodafone India
is very straight and clear that Reliance Jio should struggle with one or
another problem till the time Reliance Jio launches their service commercially.
All are expecting that post commercial launch Churn rate at Reliance Jio will
be maximum given their past experience.
At one end Reliance Jio is also
raising 15K Crore whereas the
competitors like Airtel and Vodafone is also showing their financial muscle and
it will be interesting game moving forward but will dent Reliance Jio more than
anyone else.
