'As in China, 4G Can Be A Game-Changer For India'
NEW DELHI: As Indian companies ready themselves to launch and expand their fourth generation (4G) telecom services, industry analysts expect the advent of the technology to prove a game-changer as in China, but also forecast a shakeout that could rattle incumbent players.
"TD-LTE (China's long-term evolution, or 4G standard) has proved to be a game-changing technology shift in China by providing incumbent China Mobile a working data network. This is facilitating improved data monetisation, particularly as compared with its WiFi network," says Credit Suisse.
"We also expect TD-LTE to be a game-changer in India, for quite different reasons. Specifically, TD-LTE has allowed new entrants to utilise a large, until now unused spectrum resource to enter the market," said the research consultancy in a recent report.
"We expect this to have a negative impact on incumbent operators in the shape of upward revisions in spectrum costs and capex costs and downward revisions in revenue forecasts and Ebitda margins (earnings before taxes and some charges), most of which is yet to come," the consultancy added.
"The success of China Mobile's TD-LTE network over the past 12 months confirms our view that RJio (Reliance Jio, broadband arm of the Mukesh Ambani-led group) can be a meaningful threat to Indian incumbents," it said, adding the strategy to sell both services and handsets will prove valuable.
According to Platinum Asset Management, an Australia-based fund manager, with only 2.5 land lines per head of population in India versus 20 in China, wireless allows a leapfrogging of technology.
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