Ambani KhanNearly 50% price drop with new entrant into the world's most competitive market. Update 5/11 ET points to October for the full launch Mega-billionaire Mukesh Ambani has built a 4G network to 70% of India, with 90% expected by the official launch. Reliance Jio will bring in lower prices, $60 LTE phones and should be the most important telecom event of 2016. Reliance Jio is already running a large beta with employees and setting up dealers. 

To fill that network, Ambani is offering one of the lowest prices in the world. He's already taken delivery on half a million SIM cards and requesting proposals for $50-75 mobiles in the tens of millions. The other big Indians telcos (Bharti, Vodafone and Idea) have responded by moving up their own 4G buildouts, which will soon take over the country. The increased investment is yet another confirmation that competition, not company profits, is the key determinant of investment. They will presumably reduce prices soon as well. 

Ambani initially will concentrate on fixed wireless for broadband rather than mobile voice.

There's enormous opportunity. India has one of the worst fixed networks in the world, with only 37M landlines for over a billion people. There's plenty of cable, but cable is divided into thousands of small companies and has few broadband connections. Ever invaluable Point-Topic estimates only 17-18M lines. Brazil and Russia have less than 20% of India's population but 25M lines of broadband. (Russia has 33M+ homes passed with high-speed fiber, mostly from the basement. Russia is far ahead of the U.S. in fiber.)

The billion connection Indian market is the most competitive in the world, with as many as 12 companies in some regions. So many companies means each has too little spectrum for efficiency. Marketing costs are high. Many buy dual SIM phones to take advantage of the current best offer.  NTT, Sistema, Telenor and other smaller operators are losing fortunes.  Most will soon be gobbled up.   

Randall Stephenson of AT&T was attracted by the world's fastest growth and made a trip to buy a company a while back. He saw a likely bloodbath and decided not to invest. That's one more datapoint that Randall and team are among the most capable in the world. Telecom gross sales are declining in most developed markets. Many Europeans have cut dividends as profits plummetted. AT&T has raised dividends every year. 

Ambani is all over the society pages for his lifestyle, but when visiting California often dines at Saravana Bhavan because he likes the food. (per a mutual friend)

sources: This is based on reporting in the Indian press, including Economic Times and RTN



 Reliance Jio will bring in lower prices, $60 LTE phones and should be the most important telecom event of 2016.

dave ask


CFO John Stephens says AT&T is going to cut capex soon.

Bharti in India has lost 45M customers who did not want to pay the minimum US#2/month. It's shutting down 3G to free some spectrum for 4G. It is cutting capex, dangerous when the 12 gigabytes/month of use continues to rise.

Huawei in 6 days sold 300,000 5G Mate 20s. Delivery begins on 8/16. 

China has over 50,000 upgraded base stations and may have more than 200,000 by yearend 2019. The growth is astonishing and about to accelerate. China will have more 5G than North America and Europe combined for several years.

5G phone prices are down to $580 in China from Oppo. Headed under $300 in 2020 and driving demand.

No one believed me when I wrote in May, 90% of Huawei U.S. purchases can be rapidly replaced and that Huawei would survive and thrive. Financial results are in, with 23% growth and increased phone sales. It is spending $17B on research in 2019, up > 10%. 

5G phones spotted from Sharp and Sony

NTT DOCOMO will begin "pre-commercial service Sept 20 with over 100 live bases. Officially, the commercial start is 2020.

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Welcome  1,800,000 Koreans bought 5G in the first four months. The demand is there, and most of the technology works. Meanwhile, the hype is unreal. Time for reporting closer to the truth.

The estimates you hear about 5G costs are wildly exaggerated. Verizon is building the most advanced wireless network while reducing capex. Deutsche Telekom and Orange/France Telecom also confirm they won't raise capex.

Massive MIMO in either 4G or "5G" can increase capacity 3X to 7X, including putting 2.3 GHz to 4.2 GHz to use. Carrier Aggregation, 256 QAM, and other tools double and triple that. Verizon sees cost/bit dropping 40% per year.

Cisco & others see traffic growth slowing to 30%/year or less.  I infer overcapacity almost everywhere.  

Believe it or not, 80+% of 5G (mid-band) for several years will be slower than good 4G, which is more developed.