RIL 4G rollout may be delayed to April

Reliance Industries (RIL) may not launch its fourth generation, or 4G, telecom services this year, contrary to earlier expectations of a December rollout.

It has come to light that 4G trials in Jamnagar, which were expected to be conducted in April, have now been postponed to August.

In fact, with no network partner agreements in sight and not a single tower being set up, it is unlikely the company will launch pan-India 4G services before April next year, said a company official, requesting anonymity.

An RIL spokesperson refused to confirm the likely delay in rollout or offer details.

However, Rohit Chordia, senior analyst, Kotak Securities, said the company is taking more time as it wants to launch on a big bang basis across the country and not just in a few cities.

“Besides, they may be looking at a combination of a voice and data network, unlike Airtel’s ‘data-only’ network, which will take more time to develop. The data ecosystem itself will take 1-2 years to be fully functional. Hence, RIL may take a wait-and-watch stance as it does not make much difference if they incur an initial loss of 15-20% market share,” said Chordia.

Sources in the know also pointed out that only intra-city fibre layout has started, and not inter-city.

RIL is learnt to have partnered Himachal Futuristic Communications (HFCL) for rolling out its inter-city optic fibre network. However, the network is nowhere near in place yet.
Towers are another issue.

Assuming 2,000-3,000 towers are required for each large city to ensure seamless connectivity, RIL may need one lakh towers to cover the whole country.

It takes around 10 days to set up a single tower, after securing some 30-40 permissions.

Then again, digging is not allowed during the monsoons.
And the carbon fibre towers RIL plans to roll out entail a longer set-up time, besides being considerably more expensive.
Given all this, it would be difficult for RIL to start putting up towers before October this year.

The company might schedule a trial launch in Mumbai and Delhi in December, but it would be a partial launch in only a few areas within the cities since the entire 4G network is not ready yet, said sources.

For Mumbai and Delhi, the approximate optic fibre network needed is about 9,000 km, said sources.

According to DoT guidelines for broadband wireless access (BWA) obligations, RIL has to provide 50% BWA coverage in rural areas and 90% coverage in metros within five years.
Next month will be exactly two years since RIL acquired Infotel’s pan-India BWA spectrum.

However, industry experts claim that since 4G is a lesser known and more expensive technology, RIL would rather take its time and get it right, than burn its fingers trying to keep up with competition.

In fact, sources claim that RIL is not looking at material gains from 4G before 2020.

Meanwhile, the company is in talks with several partners for managing different areas of its 4G network. For example, it is talking to Infosys and Microsoft on the platform side; Alcatel Lucent and IBM for the video platform.

Sources said RIL is also in talks with the likes of international players such as US-based Verizon, Comcast and Russia-based Yota who have a 4G experience in their respective countries. These players are expected to aid as managed services vendors for content provisioning — either managing RIL’s content network wholly or partly. An outsourced model is also expected to help in faster network rollout.

RIL will likely steer away from dongles that Airtel has been using, and offer 4G via a Wi-Fi network, in the absence of an operator network. This will be provided through MiFi — also called intelligent mobile hotspot — devices over wireless broadband, which allows 4-5 users to share the network simultaneously.

However, this again will mean time for the 4G ecosystem to develop and such devices to become easily available, hence driving prices down — which again will not be possible before next year.

As such, while the content offering may not be very different from what other 4G providers like Airtel may be offering — in terms of movies, English and Hindi short-form content, music downloads, sports, education, health, etc — it will be offered on a much larger bandwidth, (considering RIL’s pan-India BWA spectrum) and will also be offered at much more affordable price points – to be available for the common man.