The sort of gamble which Hutchison Whampoa pulls off
Reports have emerged that India’s richest man, Mukesh Ambani, chairman of Reliance Industries, has decided to sink a massive $11.6 bilion (INR 700 billion) into rolling out 4G in India. In 2013, Deutsche Bank has estimated that Reliance would pour some $3 billion into 4G, so this is over triple that figure. The investment will be made via the Reliance Jio venture and marks Mukesh’s first return to mobile after surrendering Reliance Communications to his brother Anil some ten years ago. It’s abold move and one which GoMo News has only ever seen be pulled off before by Hong Kong based Hutchison Whampoa (which currently own Three/3UK, for example).
And there’s the danger. In much of India, consumers are still struggling to obtain 3G – so why the jump straight to 4G?
Well, we reckon that Mukesh intends to follow the US model where the mobile network operators [MNOs] roll out 4G in the big conurbations where the dwellers have the income to pay for and utilise 4G.
Whereas in rurual areas, incomes are lower so why even bother to think about rolling out 4G to those areas.
There’s another advantage. Today [in 2014], 4G can be regarded as a mature technology. Hence there is plenty of competition amongst infrastructure suppliers.
Plus, if you are starting from fresh you can consider one of China’s two aggressive telecoms infrastructure providers – such as ZTE and Huawei, rather than going with an established player such as Ericsson or Nokia Networks.
And anyway, the terms of Reliance Rio’s 4G licence dictate that the company has got to start offering something by 2015.
So if you’re going to get into the 4G business, you might as well do it in big style!