No executive investing millions to billions in one mobile generation will be too happy if the market suddenly shifts. That might happen in India, where Reliance Jio’s launch as a national 4-G-only carrier could shorten the commercial life cycle--and therefore payback--from relatively recent investments some mobile operators have made in 3G facilities.
Such rapid platform transitions are relatively rare in most markets, where any particular next-generation mobile platform tends to have a decade-long product cycle, with active use on a diminished basis for up to 15 or maybe 20 years.
Given the heavy capital investment each succeeding generation tends to represent, that is a rational actor strategy.
The problem in India is a “leapfrog” by Reliance Jio straight to 4G, with no interim 3G investment. For much of the past decade, an upgrade from 2G to 3G had been the primary anticipated move.
But Reliance Jio’s disruptive move now is likely to cause less 3G investment, with emphasis pushed to 4G. That might ultimately result in rather more limited 3G investment in India than many had expected, and a 2G-to-4G leap for the bulk of the market.
No comments:
Post a Comment