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Report suggests 4G and high speed broadband from Reliance soon
Posted on: 28/Apr/2016 10:43:37 AM
In a research note, leading analysts have said that Reliance Industries Ltd. may launch the 4G telecoms and high speed broadband services in a few months time. The report has also said that the company may net $1 billion in revenue for the current fiscal year.
The report said, (The company) suggested RJio launch in a couple of months with bull and bear cases of the next 3 to 9 months. We are estimating launch in early 2H (second half) 2016; however, if the launch gets delayed to late 2H 2016, it would mean incumbents could have a better operating environment in the short term. RJio`s current test programme is to be upgraded into commercial operation in the coming months, implying that the firm would already have a couple of million subscribers into the launch.
We estimate RJio will have about 30 million subscribers by FY2017 and 60 million by FY18...clocking in over $1 billion revenues in FY17. The network roll-out is substantially complete. Management suggested capex will be front-ended and plans to spend Rs 30,000 crore, or $4.5 billion, in FY2017 which would include adding fibre, towers, small sells and payments for RCom spectrum sharing/trading. It has also launched a new 8,100 km cable system. Capex is seen eventually declining to 6-8 percent of sales. We continue to build capex of 15 percent in the longer term. However, if the RJio launch is delayed to late the second half of this year, we think Bharti Airtel is best positioned to gain. It is spending annually $2.5 billion in domestic wireless capex and by far has the highest 4G coverage among the incumbents launch.
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