"...new entrant Reliance Jio will still face the daunting task of convincing/bundling/subsidising 4G users to adopt new handsets when 95 per cent of subscribers are still prepaid with an average Arpu (average revenue per user) of Rs 160 per month.
"We maintain that that switching to 4G handsets in this low-ARPU prepaid market and wide consumer acceptance of 4G/VoLTE will remain the key hurdles for the new entrant," the report said.
VoLTE is advance version of present internet-based calls called Voice over Internet Protocol (VoIP) which is being facilitated by mobile applications like Skype, WhatsApp etc.
In case of LTE, though the technology base remains that of internet, the download and upload speed offered through it is significantly high. Airtel claims that its 4G subscribers can download 10 movies in less than 30 minutes.
"VoLTE is yet to be launched even in China and even after Reliance Jio will launch commercially, users will need 4G VoLTE phones and interconnecting to incumbent voice networks will be key...While the number of 4G-enabled handsets being offered in the market has jumped, the availability of VoLTE enabled handsets remains low," CLSA said.
The report estimates that top three operators continue to gain share and account for 73 per cent of sector revenue and expect data revenue to nearly triple to USD 14 billion.
The report project Bharti Airtel as best player to cash on mobile data boom as it holds highest quantum of spectrum among incumbents that can be used for 4G services.
"We maintain Bharti Airtel as the best play on India's mobile data boom and accelerating data network rollouts by top operators will drive Bharti Infratel's (infrastructure arm of Bharti Airtel) growth," the report said.
Elaborating on growth in 4G eco-system, CLSA said over the past three quarters India mobile device market has seen sharp rise in 4G smartphone shipments and a decline in non-4G smartphone shipments.
"Reliance Jio will also launch its own VoLTE-enabled 4G handset branded 'LYF' besides multiple distribution deals. 4G handsets are currently at 10 million (mostly not VoLTE-enabled) but in the past nine months, 4G shipments have jumped from 1 million to 5.5 million, implying one of every four smartphone shipped is 4G," the report said.
There are over 120 4G handsets currently being offered in India 41 per cent of which are below the price point of Rs 11,000 and highest number of offerings are in the Rs 7,000- Rs 11,000 range, the report said.
"Most of the VoLTE enabled handsets are above the Rs 20,000 segment however recently Indian phone manufacturers, Intex and Lava, as well as LG have launched VoLTE capable handsets priced in the range of Rs 10,000-12,000. As we near the launch of Reliance Jio's 4G services, we expect more such launches," the report said.
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