Expecting Reliance Jio to launch its broadband services by mid-July, global financial services major Credit Suisse feels Bharti Airtel is best suited to handle competition. But it also says that the new entrant has some unique, "disruptive" strategies on its spectrum.
"With 70,000-plus sites live, we believe the launch is nearing for R-Jio. We expect a soft launch by mid-July 2015, which would be earlier than the current market expectation," Credit Suisse said in its report on the Indian Telecom sector.
In a separate analysis about its first impressions on Bharti's 4G launch in Mumbai, the financial services consultancy said while the indoor coverage was patchy, the outdoor signals on the street were quite strong, with an impressive 35 Mbps download speed and 24 Mbps at the windows.
"Bharti clearly has the lead among incumbent operators of 4G deployments, and is probably best positioned to respond to upcoming R-Jio launch," it said, analysing the early-mover's "soft-launch" in Mumbai few days ago.
"However, given the scale of investments, network capacity size, and differentiating investments made, we believe even Bharti's numbers could come under pressure in the next couple of years," it added.
As regards R-Jio, Credit Suisse said the company has a two-pronged strategy -- covering services, over which it feels the network channels were in place, and then device distribution, about which it says it expected company-branded instruments to hit the market with entry-level prices of $30.
"Operators in India do not sell handsets and devices -- there are separate distribution channels managed by handset OEMs (original equipment manufacturers) and specialist logistics companies that do the same," said the report.
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"However, R-Jio is taking a different strategy and working on a dedicated handset distribution infrastructure given that having sufficient 4G handsets supply is critical for their business," it said, adding it expected the company to start selling its devices before its 4G launch.
"From our discussions, we assume R-Jio's internal target could be to sell two-thirds of all 4G smartphones sold in India through Jio's own distribution network," said the report and said it was aware of reports that scouting was on for this from China.
"We believe if R-Jio comes to the market with devices priced below $80-90, it could be quite disruptive for the market."
Coined by Harvard Business School's professor, Clayton M. Christensen, disruptive technology is described as one that displaces something already well-established and shakes up the industry with products and services that create a completely new industry.
An example: The computer displacing the typewriter.
Regarding Bharti, having said that its 4G service signals were weak indoors, the report said the data speeds were a lot to rave about when the signals were actually caught, turning out to be far more superior compared with the 3G speeds offered by Airtel's own service and Vodafone.
"The experience on video was impressive -- YouTube videos played instantaneously on Airtel LTE, while the same videos loaded with a 5-10 seconds delay on the 3G networks. True HD quality video played consistently on LTE, vs. frequent downgrade to SD video on 3G."