Reliance Jio to offer MiFi Devices

The telecom arm of Mukesh Ambani-led Reliance Industries,Reliance Jio Infocomm, is preparing to roll out its fourth-generation (4G) services towards the end of 2015. The company will also be offering portable devices known as MiFi or mobile Wi-Fi.

Reliance Jio’s MiFi devices

MiFi devices will act as hotspots and enable 4G non-compatible devices to enjoy the speeds of 4G. Reliance Jio will provide the devices at low rates. Besides, it will also be selling 4G-enabled handsets at affordable prices. It is already in talks with a number of mobile phone manufacturers for the same and has also given an order to Intex Technologies for the supply of 1 lakh 4G-enabled mobile phones. Reliance Jio is taking these steps to attract heavy data users and subscribers from rival companies.

MiFi devices will play a significant role in Reliance Jio’s plan of building a high-speed 4G ecosystem, even without 4G-enabled or Long Term Evolution (LTE) handsets. Buying new handsets will require users to invest more, which is precisely why experts believe that Reliance Jio will heavily promote the LTE hotspot devices to expand its market. Additionally, the company may also give bundled offers to enhance the penetration of LTE handsets.

Currently, most mobile data users do not have 4G-enabled handsets despite the fact that the rates of such phones have fallen as low as INR 5000. A single MiFi device connects 10 devices at a time. Its market price is nearly INR 3000. Sandip Agarwal, a telecom analyst at Edelweiss Securities predicts that Reliance Jio will halve the price and may offer these devices at around INR 1,500, as a part of its market strategy.

4G services are high-speed data services that enable users to download music videos or movies in a matter of minutes. Speeds offered through 4G services are much higher as compared to the popular third-generation (3G) services. Many telecom operators in the country are relying on the demand for high-speed networks to boost their profits.

Views of analysts

Analysts suggested that the data volume of Bharti Airtel will increase 11.3 times from the Financial Year (FY) 2014 – 2015 to FY 2019 – 2020 with a compounded annual growth rate of 65.1%, while that of Idea Cellular will increase 12.2 times in the same period, with a compounded annual growth rate of 62.3%. Currently, heavy data users are subscribers of Bharti Airtel, Idea Cellular and Vodafone. Experts predict that the entry of Reliance Jio will heavily impact the business of many major telecom operators.

Agarwal said, “Of course it (Reliance Jio) will target a high incremental market share gain by helping to create a viable ecosystem of low-end LTE phones.”He estimated that by the end of FY 2015 – 2016, Bharti Airtel, Idea Cellular and Vodafone’s 3G subscriber base will touch 83 million users. “Reliance Jio will specifically target this segment and may subsidise MiFi devices to ensure attractive value proposition for customers. By 2019 – 2020, Reliance Jio will target shifting 25% of incumbents’ 3G data subscriber base to its network,” he added.

Summary

Reliance Jio will be offering portable MiFi devices to enable non-4G compatible devices run at the speeds of 4G.

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