India: What does a 4G tablet from Reliance mean?

By | 29 January, 2011

Reliance Industries’ re-entry in to the telecom sector meant only one thing a few months back. Reliance was back in telecom. Now it means more than one thing. Reliance is back in telecom and it might rule the data business for some time to come. Voice, by now, has become a commodity and and everybody is moving to the data and content business. Though there are still battles to be won for content, data business is up for grabs. Long waited 3G services are supposed to answer India’s data business problems and probably increase the broadband penetration.

Both the 3G and 4G operators have the same pool of customers to tap into. 3G services could come cheaper and 4G service could come in at a cost. The real problem for 3G players would come in when Reliance would play the notorious price game. Let’s say Reliance really doesn’t care about money and all it needs is  a subscriber base. It would definitely play the money game. Airtel or the other-Reliance comes in with a 3G data plan that is affordable and makes sense. RIL comes with a 4G plan which makes even more sense. 4G kicks 3G’s ass in terms of speeds. If both 3G and 4G come at the same price then what would you really subscribe to?

Now that we got the pricing out of the way, the next in line is hardware. Reliance (the other one) was one of the pioneers in bringing down the cost of hardware in telecom. It managed to do it with attractive lifetime prepaid plans for the mobile connections. 4G connections or broadband connections would be no different. Reliance is already in talks with 15 Taiwanese manufacturers to get in a 4G tablet for 2011. The price will be Rs. 8000 (175 percent). The tablet itself might cost more to Reliance but economies of scale work really well. The cost of Rs.8000 would probably be for a million or two million tablets – which can be easily sold when bundled with attractive 4G service. Reliance is known for its execution and China and Taiwan are not too far off from India. The brighter side of this is 3G tablets will become inexpensive. Either way, broadband for masses will be a reality.



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