<p>Consumers are likely to be spoilt for choice when it comes to choosing their service provider for a fourth generation (4G) network. <br /><br /></p>.<p>While Airtel has already gained the first mover advantage by launching its services way back in August, Reliance Jio and Vodafone are likely to join the bandwagon within the next three months (December 2015).<br /><br />“Post Bharti’s 4G launch we expect both Idea and Vodafone to commercially launch 4G in select urban cities, mainly from a branding/creating consumer perception perspective. The top three telcos are looking to offer 4G to prevent their subscribers from being poached by Jio, which will launch as a 4G-only telco. In our view, both Vodafone and Idea will launch 4G only in select cities (rather than entire states), where they are seeing a material data uptake and an increase in improvement of 4G smartphones. Given that 4G smartphone prices are declining, and considering that 4G data tariffs could be cheaper/at par with 3G, we believe that 4G uptake may positively surprise despite a smaller rollout,” Bank of America Merrill Lynch said in a note.<br /><br />The management of Idea Cellular, in a recent conference call with analysts, said that the company is planning to roll out 4G services in six service areas by the end of the current financial year (FY16).<br /><br />Interestingly, many of the 11 companies (including Vodafone, Bharti, Reliance and Idea), which were granted payments bank licences by the Reserve Bank of India are telecom companies. Analysts believe that this will certainly help increase revenues of these telecom players, besides increasing customer stickiness.<br /><br />Payment pays<br /><br />“With five of the 11 companies that received payments bank licences being telcos, we expect an increased number of transactions shifting away from traditional offline channels to mobile. However, we believe that telcos would complement banks rather than compete with them. We expect telcos like Bharti/Vodafone to couple their existing wallets with payment licenses to help improve consumer stickiness and generate incremental revenues from higher data usage,” BoAML said.<br /><br />“While telcos will look at addressing the unbanked market, we do not expect telcos to be materially successful in this space initially given that this segment needs an ‘assisted model’, limiting material uptake,” BoAML added.<br /><br />HSBC, in a note on RIL, also believes that the payments bank license for the company is only likely to benefit the telecom business of the company.<br /><br />“The payments bank licence will complement Reliance Jio’s offer of voice, data and content. Reliance will be able to offer seamless payment options to all third-party vendors including payments to local mom and pop stores, roadside stalls, and sundry service providers such as housemaids, drivers, taxis, while also offering deposit, remittance and payment services to a wide swathe of customer base across the length and breadth of the country,” HSBC said.<br /><br />The payments banks licence has the potential to digitise cash transactions and help grow the third-party payment market. Jio can benefit by locking in customers by integrating banking services with its communication infrastructure, HSBC added.<br /><br /><br />Fourth generation fortunes<br /><br />The 4G mobile market to teem with numerous operators<br />Airtel, Reliance Jio, Vodafone and Idea are first off the block <br />All four players have got payments bank licences<br />Analysts say move to help bridge ‘transaction’ and ‘communication’ <br /><br /><br /></p>
<p>Consumers are likely to be spoilt for choice when it comes to choosing their service provider for a fourth generation (4G) network. <br /><br /></p>.<p>While Airtel has already gained the first mover advantage by launching its services way back in August, Reliance Jio and Vodafone are likely to join the bandwagon within the next three months (December 2015).<br /><br />“Post Bharti’s 4G launch we expect both Idea and Vodafone to commercially launch 4G in select urban cities, mainly from a branding/creating consumer perception perspective. The top three telcos are looking to offer 4G to prevent their subscribers from being poached by Jio, which will launch as a 4G-only telco. In our view, both Vodafone and Idea will launch 4G only in select cities (rather than entire states), where they are seeing a material data uptake and an increase in improvement of 4G smartphones. Given that 4G smartphone prices are declining, and considering that 4G data tariffs could be cheaper/at par with 3G, we believe that 4G uptake may positively surprise despite a smaller rollout,” Bank of America Merrill Lynch said in a note.<br /><br />The management of Idea Cellular, in a recent conference call with analysts, said that the company is planning to roll out 4G services in six service areas by the end of the current financial year (FY16).<br /><br />Interestingly, many of the 11 companies (including Vodafone, Bharti, Reliance and Idea), which were granted payments bank licences by the Reserve Bank of India are telecom companies. Analysts believe that this will certainly help increase revenues of these telecom players, besides increasing customer stickiness.<br /><br />Payment pays<br /><br />“With five of the 11 companies that received payments bank licences being telcos, we expect an increased number of transactions shifting away from traditional offline channels to mobile. However, we believe that telcos would complement banks rather than compete with them. We expect telcos like Bharti/Vodafone to couple their existing wallets with payment licenses to help improve consumer stickiness and generate incremental revenues from higher data usage,” BoAML said.<br /><br />“While telcos will look at addressing the unbanked market, we do not expect telcos to be materially successful in this space initially given that this segment needs an ‘assisted model’, limiting material uptake,” BoAML added.<br /><br />HSBC, in a note on RIL, also believes that the payments bank license for the company is only likely to benefit the telecom business of the company.<br /><br />“The payments bank licence will complement Reliance Jio’s offer of voice, data and content. Reliance will be able to offer seamless payment options to all third-party vendors including payments to local mom and pop stores, roadside stalls, and sundry service providers such as housemaids, drivers, taxis, while also offering deposit, remittance and payment services to a wide swathe of customer base across the length and breadth of the country,” HSBC said.<br /><br />The payments banks licence has the potential to digitise cash transactions and help grow the third-party payment market. Jio can benefit by locking in customers by integrating banking services with its communication infrastructure, HSBC added.<br /><br /><br />Fourth generation fortunes<br /><br />The 4G mobile market to teem with numerous operators<br />Airtel, Reliance Jio, Vodafone and Idea are first off the block <br />All four players have got payments bank licences<br />Analysts say move to help bridge ‘transaction’ and ‘communication’ <br /><br /><br /></p>
