The commercial launch of Reliance Jio's 4G services may be pushed back to December 2016, according to a Bank of America-Merrill Lynch note to its clients.
Reliance Jio may delay the launch of their services until they're absolutely confident of creating a very good first impression among its early customers in terms of overall quality of service and customer experience.
Reliance Jio was expected to launch its 4G services by December 2015, but the launch got pushed back initially to March 2016. The further delay may make it more difficult for Reliance to gain top-end consumers from rivals like Airtel, Vodafone and Idea Cellular.
The initial target for Reliance is about 40 million top end users all over India who use single SIM phones. These consumers may not port to Reliance just to test their network.
IIFL Institutional Equities is also expecting Jionet's launch around December this year. The major cause of the delay is probably the MTS takeover by Anil Ambani's Reliance Communications with which Reliance Jio has an agreement to share 850 MHz airwaves all over India. The takeover is currently awaiting approval from the Department of Telecommunications. Unless RCom gets the approval, it won't be able to share the licence with Reliance Jio.
This delay is likely to give more room for expansion to Airtel, Vodafone and Idea. The existing players will not only strengthen their networks but also bring down data tariffs. The top consumers of these networks are less likely to move to Reliance if they get high quality services. Most of the 4G consumers have been expecting disruptive pricing from Reliance Jio; which was expected to launch its services in this month.