4G Explosion In India By 2018 - BofA ML Report

New Bank of America Merrill Lynch (BofA ML) report hints at upcoming 4G explosion in India by FY 2018. The report says that India will see upwards of 9 crore 4G service subscribers in the next two years. It also hints at possible benefit to the 4G players like Airtel, Vodafone and Idea Cellular if the heavyweight Reliance Jio telecom delays its entry to the market. Mukesh Ambani has earlier confirmed that Reliance Jio will begin rolling out its Reliance Jio 4G Launch By December, Informs Mukesh Ambani this year.

The report also says that Indians will own about 18 crore 4G enabled smartphones in the next two year timeframe. The rapid migration to 4G capable handsets will drive the 4G usage in India, boosting the subscriber count from current almost nil to 90 million in the next two years. The report has been prepared by analysts Sachin Salgaonkar, Karan Parmanandka and Simon Dong-je Woo from BofA ML.

The report looks at the Reliance Jio Broadband & 4G Plan Tariff : AWESOME! and makes a prediction that the gap between 3G and 4G tariff will shrink. The margin will be so thin that it may led to current 2G subscribers directly jumping the ship to 4G, skipping the third generation.

The report says that the 3G users are likely to remain confined to the areas where 4G coverage is limited. It further adds that because the 3G coverage is likely to remain wider than 4G, the 3G subscriber uptake is likely to remain stronger.

The report lists Airtel, Vodafone and Idea Cellular as current major players in the 4G domain and expects that Reliance Jio entry would lead to stiff competition. The major players are likely to roll out 4G services in the urban areas by the end FY 2015 and 2016 is likely to see the expansion of 4G coverage to tier II and III cities in India.


The report notes that the entry of Reliance Jio will bring down the current tariff for 4G services. The top 5% customers, mostly post-paid, of the big players won't prefer switching to new services by Reliance Jio; and hence Reliance may find it difficult to capture the creamy subscribers. Reliance will have to create a major differentiator in terms of pricing and overall features to attract these customers.

These top 5% consumers of the telcos contribute about 15% of the revenues and Reliance must think of getting these consumers.

That said, the report expects Reliance Jio to become the market leader by 2017 in terms of overall subscriber base, and continue till 2025.

As of now, Airtel has already began offering its 4G services in over 296 cities in India with over 35,000 base stations. Airtel's going gung-ho to capture new users by offering 4G plans at the price of 3G. Other major players like Vodafone has confirmed that it will begin 4G rollout starting December in Vodafone 4G In Mumbai By December 2015 and Vodafone 4G Service In Delhi NCR Begins In December On 1800 MHz Band.

Reliance is in the process of setting up infrastructure at key locations throughout India and is also preparing 4G capable Reliance LYF 4G LTE Smartphones To Ensure Rapid 4G Penetration In India at affordable rates. It has already began testing 4G services with its Reliance Jio 4G Beta Rolls Out For Reliance Employees and in select areas in Reliance Jionet 4G Hotspot In Mumbai At Select Ganesh Utsav Pandals.