Reliance Jio Infocomm may go for an extended soft launch in early April purely to test if its 4G network is reliable and optimized enough to handle a full blown commercial launch after three-to-six months, Bank of America Merrill Lynch has said.
“Through the extended soft launch, we believe Jio will test whether its (4G) network is capable of handling the data load of millions of consumers so that the company does not face any network glitches when it commercially launches the US brokerage said in a March 29 note to clients seen by ET.
According to Bank Am-Merrill Lynch, “Any bad consumer experience at the time of testing would still be manageable (for Jio) as it would currently be a free service”.
The US brokerage, however, expects very few takers for Jio’s Lyf handsets during the soft launch phase, which could induce the company to extend the service to non-Lyf users as well.
“In our view, not many users would pay Rs 5K-to-20K to buy a Lyf handset for accessing free data for just three months as there is limited visibility on the tariffs Reliance Jio will charge beyond the three months,” the brokerage said.
The brokerage, in fact, expects a majority of consumers opting for cheaper “MiFi devices priced in the Rs 700-to-800 range, if these are available”.
According to the US brokerage, “If Jio wants to stand out as a good quality network with minimal call drops, the company would need to add an 850 Mhz overlay to its existing 1800/2300 MHz Mhz network, which could delay the launch to December”.
In an earlier note a little over a week ago, BankAm Merrill Lynch had warned that Jio’s commercial launch of 4G services might get pushed to December, in which case it would face difficulties in poaching high-end consumers from incumbents Bharti Airtel BSE -1.16 %, Vodafone and Idea Cellular unless it reduced prices.
Brokerage IIFL Insitutional Equties had also said that Jio’s full-scale 4G launch was likely only in December as much would hinge on conclusion of RCom-Sistema Shyam