Reliance Industries Ltd (RIL)'s telecom entry might have two effects, says a Credit Suisse report. In the long term, it might make the market very competitive and in the short term, the firm might make the 2G auction price aggressive.
The bank expects RIL's LTE modem and dongle to sell at lower price points than that of Bharti’s which sell at Rs 7,500-8,000 a piece. “It is not impossible for RIL Infotel to price an LTE dongle at a 35 per cent discount to Bharti’s current price or at around Rs 5,000,” it said.
“We assume RIL Infotel will launch with data tariffs at 8p/MB. Our assumption thus places RIL Infotel at a 75 per cent discount to Bharti’s current data tariffs,” Credit Suisse said. The report also expects RIL to cover around 33-40 per cent nationwide population within three to five years of launch, respectively. This includes an aggressive 100 per cent population coverage in the top 15 cities, the cream of the data market.
RIL's telecom entry will make mkt competitive, says Credit Suisse