Mumbai: Reliance Industries (RIL) may begin commercial operations of its telecom arm Reliance Jio Infocomm Ltd (Jio) from October, said Asia-based equity broker and investment group CLSA.
In a report titled ‘Building Jio Into Estimates’, CLSA analysts Vikash Kumar Jain, Deepti Chaturvedi and Akshat Agarwal said, “With Jio willing to showcase its services to a larger user base, we may be nearing a commercial launch. We model a start of Jio’s commercial operations from October ’16… and model in 25 million/70 million subscribers by the end of FY17/18”.
Starting last week, Jio has expanded its trial service of Jio SIM cards on an invite-only basis. Under the programme, a user gets a trial SIM card and an LYF phone if he has an invite from an RIL employee.
The service comes bundled with unlimited voice calls and 4G data for a period of three months. The trial SIM cards, however, are not available without LYF phones.
Jio SIM cards were earlier made available only to RIL employees, partners, vendors and associates, which meant a user base of about 500,000 users.
Under the referral scheme, an employee can refer 10 friends. Many of them have exhausted their referral quotas and are awaiting new ones.
“We think Jio will be seen as a success and we include its value in our SoTP (sum of the parts) along with that of retail and raise our target from Rs.1,275 to Rs.1,350”, CLSA said, adding that it assumes the average rate per user would rise from Rs.250 to Rs.300 per month in five years driven by higher data usage.
In a separate report dated 9 May, Morgan Stanley said it expects the Jio launch in the next three-nine months. “RIL indicated that spectrum from RCom (850Mhz) will be integrated in the coming weeks, setting the stage for a full-scale rollout.”
RIL has invested close to Rs.1.5 trillion in its telecom venture. Chairman Mukesh Ambani had in March described Reliance Jio as the world’s largest start-up.
Last week, RIL began expanding its sales network for its LYF devices by launching the first of the series, a smartphone called LYF Water 5, exclusively on online marketplace Amazon. The smartphone is priced at Rs.11,699.
Jio started selling LYF phones in January through Reliance Digital and Digital Express stores and on mylyf.com—the phone’s official website. RIL is in talks with multiple online and brick-and-mortar retailers to sell LYF smartphones and smart television sets, an RIL executive said, on condition of anonymity.