For Reliance Jio it is important to bring customers in confidence before the launch.
Reliance Jio Infocomm is likely to push the commercial launch of its 4G services to December, US brokerage company Bank of America-Merrill Lynch (BofA-ML) said.
The company rolled out its 4G services exclusively for Reliance employees in December last year. However, the brokerage says that there's still no clarity about its commercial launch.
In February, Mukesh Ambani had said that the company will be ready to launch its services in the second half of 2016.
"Despite completing an employee soft launch in December 2015, we do not yet have visibility on the timeline on commercial launch by Jio. In our recent meetings with industry participants, we found a consistent view coming out of risks of Jio launch being pushed to December 2016", said BofA-ML report.
As per the report, the Mukesh Ambani-led telecom company Reliance Jio, is still trying to lay the foundation with its customers in terms of network quality as the sector is overcrowded.
The report suggests that post-paid customers are more 'brand loyal' which may make it difficult for Reliance Jio to poach them -- which may be another reason for the delay.
"The 40 million-odd top-end consumers are high-end, single-SIM users, and in our view, they will not use dual SIM smartphones nor port out from incumbents".
Even IIFL pitches the launched at December, saying, "Considering the likely timelines of the RCom-Sistema merger, and initial trial reports of Jio's VoLTE offerings, a full-scale 850 MHz-supported launch by Jio is likely by December."
However, according to BofA-ML's report, this may not necessarily be a bad thing. The report says, the delay will enable Reliance Jio to enter in 60-70% of the cities with an improved ecosystem.
Further on, BofA says that in comparison to the three telecom majors -- Bharti Airtel, Vodafone and Idea Cellular -- with a launch scheduled for the end of the year, Jio will get "a 6-8 month window to fortify their respective 3G/ 4G networks, inch down data tariffs, and also be in a position to slightly tweak up voice tariffs".
However, on the flipside, Airtel, Idea and Vodafone have already rolled out their services in select cities, which may poise them at an advantage to respond to whatever Reliance Jio may have, to throw their way.
The report says, "They would be in a better position to respond as they would have more time to build networks and respond effectively to Jio's challenge".
Earlier this month, domestic agencies like Crisil and India cut their outlook for the telecom sector by a notch, saying the Mukesh Ambani-led company will squeeze the market shares and margins of existing players.
"We have revised the telecom sector outlook for FY17 to stable-to-negative from stable. The launch of Reliance Jio will intensify competition which will squeeze the market share, margins and credit metrics of the incumbents," India Ratings said in a note.
Crisil has given a negative outlook on the sector, citing heating up of rivalries as one of the factors for its view.
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