Bharti 4G Launch: What It Means For RIL

The 4G launch of Bharti Airtel Ltd. today in Kolkata is unlikely to give sleepless nights to its arch rival, Mukesh Ambani of Reliance Industries Ltd. (RIL).

It doesn't change the dynamics of the war between Bharti and Reliance though. Bharti may be the first one to launch 4G, the player who gets an early lead might not be the one to reach the end point first.

It would have been a huge setback to Reliance if Bharti had launched services in either Delhi or Mumbai. Kolkata had a total of 24.7 million wireless subscribers at the end of February 2012, much lesser than the 41.9 million in Delhi and 36.4 million in Mumbai, according to the Telecom Regulatory Authority of India (TRAI). The proportion of high-value subscribers are likely to be more in the two prominent business cities of Delhi and Mumbai. And Bharti, as of now, doesn't have spectrum in these two big cities. Reliance, on the other hand, is the only player to have a pan-India Broadband Wireless Access (BWA) spectrum. (See India Welcomes 4G Services and RIL-Bharti: Stage Set For Round 2.)

Bharti was thinking of having roaming agreements in place to offer 4G services across the country. This would have been possible earlier, but is unlikely post the 3G-roaming controversy. This gives a huge advantage to Reliance Industries. (See End of 3G Era? and Real Reason for 3G Roaming Mess.)

The advantage Bharti has over Reliance is of voice [services]. It is not just an established brand but a market leader, and will find it easier to bundle and push 4G services to its existing subscriber base. Reliance will have to think of a strategy to offer voice along with data to its subscribers. Moreover, Reliance will have to start from the beginning.

There is another twist in the tale - the forthcoming auction of the 700-MHz spectrum band. A strong buzz in the industry is that Reliance has delayed the launch of its services to bid for the 700-MHz auction, which is likely to be held later this year. Rest assured, Bharti would also be looking forward to this auction in the hope of procuring spectrum for circles in which it doesn't yet have. For Reliance, this means procurement of more efficient spectrum. This auction has the potential of being a face-off platform for the two players. (See Game Changing Opportunity For RIL?)

The significant thing to note is that there is no indication from Reliance regarding the launch of its 4G services. What is known is that the company is conducting trials with vendors and plans to start a small pilot in Jamnagar. There is, however, no official word from the company regarding its 4G launch. (See IndiaWatch: Telenor Sues Govt For Arbitration and RIL's LTE Rumor Mill.)

Gagandeep Kaur, Editor, Light Reading India