In Business Model, Internet Access, Mobile, News, Spectrum

Reliance Jio, which will launch its new 4G services soon, likely will use an established method of boosting demand for fourth generation Long Term Evolution services even before there is a large base of mobile handsets able to use 4G networks.

Other networks launching 4G LTE have sold personal hotspot devices that, in turn, are able to support connections to other devices (mobile phones, PCs, gaming devices) that do not have native 4G LTE capability.

In essence, the personal Wi-Fi hotspot device becomes a gateway used by other devices.

‚ÄúReliance Jio is expected to aggressively promote LTE hotspot (Mi-fi) devices to expand its addressable LTE services market. It may also offer bundled offers to improve penetration of LTE handsets,” said Sandip Agarwal, telecom analyst at Edelweiss Securities.

Mi-fis can connect up to 10 devices at a time and cost around Rs 3,000. Bharti already has launched its Airtel 4G Mobile Hotspot to promote its 4G services.

Agarwal said Reliance Jio might cut prices of Mi-fi devices by 50 percent to around Rs 1,500 to create demand.

According to analysts, Bharti Airtel and Idea Cellular’s data volume will grow 11.3 times and 12.2 times, respectively, between 2015 and 2020, a compounded annual growth rate of 65.1 percent and 62.3 percent, respectively.

Reliance Jio initially will use Mi-Fi to try and gain an early foothold in the mobile market, even before affordable 4G phones are widely available.

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