Looking at the data consumption upswing in the country, vis-a-vis revenue from the traditional voice telephony, the report says the latter's revenues will grow only at 3 percent annually. Overall, the revenue growth for the industry is forecast at 6 percent per annum.
The data growth, says the report, is "in part thanks to Jio making the service more affordable (handsets and tariffs)." As announced by the company earlier, Reliance Jio is to launch its 4G services in India by December this year.
"Like any new entrant, Jio will eat into the revenue market share of the incumbents, especially the weaker players. Jio will offer both voice and data, but its market-share gains would likely be more significant in data than voice given the trend in the sector," it says.
The report says with relatively inferior spectrum and long term evolution (LTE) delays, Idea will lose the most. "Infratel (Bharti Infratel), in contrast, looks best positioned to ride the data wave. For Airtel, market-share impact could be the least given its best-in-class spectrum."
It says incumbents will need higher capex not only to counter Jio's superior spectrum, but also to expand 3G or 4G networks. "Anecdotal evidence shows Airtel's 4G coverage is patchy."
"The regional threat of new entrants disrupting competition could play out in India as well with the impending entry of Reliance subsidiary Jio," the report says, adding: "We expect Jio, with its heavy investments and superior LTE-related spectrum, to restrict incumbents' growth."
As regards Reliance Communications (R-Com), the report feels it could end-up trading its spectrum with Reliance Jio, as opposed to sharing,
"While R-Com's spectrum could be used in multiple ways - sharing, merger and acquisition or trading - we believe trading would likely be the preferred route," it says. "Sharing would not help increase 800MHz footprint. Jio would not get much benefit as it too needs 800MHz in the same band for sharing with R-Com."