Vodafone India Embarked $3 Bn - Bad News for Reliance Jio

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.

TRAI Current Feeler on Point of Interconnect and Termination Charges - One Gaining, Rest Loosing

Based on the reports published in Economic Times, TRAI offered their intentions clear by sending out feeler that they are not going to allow Incumbent Operator such as Airtel , Vodafone, Ideacellular and others to ask for higher termination fee. They also indicated that Incumbent operators must provide required number of point of interconnect to Reliance Jio.

If I am not wrong, TRAI few days back released an statement that they recommended the concerned parties to resolve the concerns through talks. They also pointed out that in case both the parties will fail to come to common agreement then only TRAI is going to intervene.

Since Economic Times came out with the report and if I believe on that report then I want to ask TRAI very simple query that " How TRAI came to conclusion that talks will yield no result". " Why they are not focusing on revenue loss which will be incurred by Government given the impact of low per minute realization.

At the end its my assessment and i might be wrong that India is a place where the single agenda of regulators are to squeeze out player. Regulators must realize that any degradation of Incumbent mobile operator financial health means job losses, more NPA, impact on IT sector, Impact on Startups and loss of government revenue and more importantly another recession.

Its a right saying in India that If I am happy then rest happy; If I am sad then rest should be sad. Dear regulators please wake up...

TRAI Intervention to Settle Dispute Between Jio & Airtel,Vodafone,Idea cellular - Settlement will lose their Relevance

Post incumbent mobile service provider Airtel,Vodafone and others letter to PMO that they are not legally bound to give point of interconnect to enable Reliance jio initiated call to be terminated on Airtel or Vodafone or Idea cellular or others network. COAI president Rajan Mathews on records said that Airtel or Vodafone or Idea cellular or others don't have the financial strength to enhance their network or their existing network capabilities to handle such an humongous traffic and it will reduce their per min realization to 22 to 20 paisa which will lead to a situation where incumbent operator will start bleeding and will come to a situation wherein they may turn up as sick company. TRAI sudden change of heart to get the handshake done between incumbent and jio is to ensure that all are settled before spectrum auction ad government of India is expecting 5.6 lakh crore from auction and it will help government to fix their fiscal deficit.

In a scenario, incumbent operator agrees to offer point of interconnect and change their stand will be suicidal. It will give Jio a talking point that all the disruption were intentional instead of technical limitation.  It will change the perception of user that incumbent operator never wanted to reduce the cost of service. More importantly COAI will lose its relevance moving forward. It will be interesting to see the outcome but in my point of view that impass will remain be there and it will go to Supreme Court at the end which will impact Jio network performance and user experience.  At the end who will be the loser will be end user.

For more information please visit your YouTube Channel:- Devendra Prasad 

Airtel and Vodafone Exposed Reliance Jio Tariff Claim

Post Reliance Jio came out with their Tariff plan and claimed that their data plan is 1/10 th cheaper tha the competitor took everybody by surprise. Airtel , Ideacellular share price tanked by 8 to 9 % and everywhere Reliance Jio digital team claimed that here comes the free call.

Airtel and Vodafone post their analysis of Reliance Jio Tariff, shot back with presentation which clearly stated that their per GB cost will be coming around INR 66. At the same time, they also offered insight about the limitation of using Reliance Jio network. In my point of view, Reliance Jio is a closed loop network and both the source and destination should have VoLTE devices to send and receive calls.

               

For more information one may visit my YouTube channel

https://www.youtube.com/channel/UCFUdG57ubM2Ld1svEc028xQ

Failed to Understand Reliance Jio $25 Bn Investment vs. Ignoring Acquisition of Incumbent with Market Cap of $ 12 Bn

Reliance Jio is at the verge oflaunching India's biggest Startup service and it took them six years to lay down the network from scratch. It's really nice to see that some of the Indian Industrialists believe in Indian consumer and are willing to invest fortune to offer low priced service to make the service affordable.

It's also truly admirable aspect that Reliance Jio kept on investing relentlessly without  even thinking that they are risking their investment as many complex technical and business related issues were arising on daily basis.

At the same time, I am just trying to understand that why Reliance Group decided to wait for six years , investment of more than $25 Bn, Shattering their balance sheet from Net Cash positive company to debt laden company. Idea Cellular is one of the most dynamic company and was in the process of rebuilding the brand coupled with great growth potential. With Reliance Cash generation as well as credit creating capabilities, Idea Cellular was most suitable target for them at that point of time. I am considering today's valuation including debt on their balance sheet and that is just half of what Reliance Jio invested in brand new network which is not even tested with multimillion concurrent user.

In current scenario, Reliance Jio will take another 15 years to recover their cost and incurred interest provided they capture number 1 position and by that time renewal period of spectrum will come whereas in second scenario if Reliance would have gone for Idea Cellular acquisition, by now Reliance could have changed the whole dynamics of Indian Telecom sector.

I failed to understand so thought of sharing with reader and if someone can give their point of view then it would be great