Reliance Jio Infocomm is planning to launch its 4G LTE services in India by 2015. Their plan is to take the Indian telecom market by storm by offering high-speed 4G data packs at attractive prices. Morgan Stanley, a U.S. based financial services company, doesn’t see the Reliance Jio Infocomm to be profitable within the next 7 to 8 years.
The analysts at Morgan Stanley say that there is no worldwide example of a new entrant coming in with new technology and getting prosperous within a few years.
These predictions come from the fact that some entrants in the Middle East and Europe haven’t even secured 14% market share even after 7 years of their launch date.
It also points that the combined market share of the telephone companies which entered the developed markets of U.S. and Canada within the last 5 years is not even in double digits.
A spokesman from Reliance Jio said that their business model is unique and is not comparable to other international telcos. It is worth noting Reliance Jio Infocomm announced in Dec, 2011 that they’ll offer 4G data for as low as Rs. 10/GB. Though we are not sure that they’ll offer 4G data as such a low price, but one thing is certain, it will be comparable to the price tag of current 3G plans.
Morgan Stanley notes that Reliance Jio may not be able to commence the mass deployment anytime soon since it doesn’t have the incumbency advantage that other operators like Airtel and Aircel have in India.
This prediction of Morgan Stanley is exactly contrary to what a Switzerland based financial services company, Credit Suisse believes. We’ll know what happens in due course of time. But, dominating the 4G market in India certainly wouldn’t be as easy for Reliance Jio Infocomm as originally thought off.