Reliance Jio aims for 100 million users in 12 months of 4G launch

Mukesh Ambani wants the target to be attained in the first 100 days.

Reliance Jio (RJio), the telecom arm of Mukesh Ambani-led Reliance Industries (RIL), aims to acquire 100 million subscribers in the first year of its launch, even though the company has delayed the roll out of fourth-generation (4G) mobile internet services to the next financial year.

While Mukesh Ambani wants the target to be reached in the first 100 days after the launch RJio's 4G services, the leadership and analysts see 12 months as "realistic" timeframe to achieve such a figure.

Earlier, the company had said that it would be able to offer 4G services by December, but it recently postponed the launch to 2016. The company has already spent Rs 100,000 crore in the venture and plans to invest a "similar amount" in the coming days, Business Standard reported.

In what could to a major concern for other telecom operators, RJio is primarily aiming to bring existing high-value customers on its network, by offering "unlimited access to high-speed broadband services (4G or LTE) on a subscription-based model."

Some analysts said that RJio's target of acquiring 100-million subscribers is "achievable", taking into account its vast distribution network. It has access to 1,000 company-controlled outlets and one million distributors for recharge vouchers.

RJio is likely to have robust infrastructure by the time it launches its 4G services, with 75,000 4G cell sites, 250,000 km of optic fibre and 0.65 million sq ft of data centre capacity.

On the other hand, Bharti's data centre subsidiary has a capacity of just 0.16 million sq ft, according to Deutsche Bank.

So far, Airtel has not revealed the subscribers or revenue it earned after the launch of its 4G services in nearly 300 towns in August.

Deutsche Bank Global Markets projects "RJio's mobile business to have 94 million subscribers (15 per cent of smartphone users) with an ARPU (average revenue per user) of Rs 246 a month, implying 8.5 per cent of wireless revenue share. "

According to Deven Choksey of KRChoksey, RJio is estimated to gain 100 million subscribers in the first 12 months of launch and an ARPU of Rs 500 per month, which would result in monthly revenue of Rs 5,000 crore.