January 25, 2021

4G spectrum an advantage for Airtel ,Reliance Jio:CLSA

Bharti Airtel and Reliance Jio Infocomm are better placed than Idea Cellular and Vodafone India to cash in on the ongoing mobile data boom because of their pan-India 4G spectrum holdings, cell sites and fibre advantage, brokerage CLSA has said.
CLSA said Mukesh Ambani-led Reliance Jio would “also accelerate countrywide data adoption levels” once it launches fast mobile broadband or ‘4G’ services commercially, and is better positioned along with market leader Bharti Airtel to grab high-ARPU (average revenue per user) subscribers, who would generate over 60% industry revenues.
Vodafone India, the country’s second-largest mobile operator, and No. 3 carrier Idea “would need more data spectrum” to protect turf, the brokerage said. “Though (combined) 3G/4G adoption levels have picked up over the past two years, current data tariffs make video viewing expensive,” which is why Jio’s 4G services should help accelerate data adoption, usage and overall spends,” CLSA analysts said in a note, a copy of which is with ET.
At current 3G/4G data tariffs of Rs 110-260/GB, the cost of viewing a two-hour movie in HD (high-definition) works out to Rs 1,100, which, the brokerage said, is significantly higher than Rs 100-120 per movie charged by direct-to-home (DTH) television service operators in movies-on-demand format.
Mass adoption of 3G/4G services, it said, would hinge on smartphone penetration, network speeds, availability of relevant content and data pricing.
In fact, the brokerage expects number of high-ARPU customers, who generate over Rs 300 a month, to grow from 165 million to 300 million by March 2018 amid rising adoption levels of 3G/4G services. Over the past two years, combined base of 3G/4G customers has trebled to 120 million.