Apr 27, 2016

What Tim Cook (essentially) told Mukesh Ambani: Hurry up, buddy!

Mobile phone service companies in India are investing heavily to provide LTE based 4G networks, but they are yet to gain considerable traction.

BYPranav Dixit

Apple saw its iPhone sales grow 56% in India in the quarter to March 31 but CEO Tim Cook has blamed the lack of high-speed 4G telecom infrastructure in the country for holding back the uptake of Apple’s flagship phone here.
Mobile phone service companies in India are investing heavily in infrastructure and spectrum to provide LTE (short for long term evolution)-based 4G networks, but they are yet to gain considerable traction.
The most ambitious among them, Reliance Jio, led by industrialist Mukesh Ambani, has been working for six years on its 4G LTE plans, but the rollout, despite the company spending over ₹150,000 crore (more than $23 billion) to date, has been delayed. The service is now expected to launch in the second half of this year.
Cook, announcing Apple results on Tuesday, skirted any reference to the mismatch high-priced Apple products — its flagship iPhone 6S model officially retails for ₹62,000 in the country, although you can find it cheaper in online stores — have with price-sensitive markets such as India. This is commonly seen as the biggest challenge for Apple as it pushes into under-penetrated markets and was underscored by the company’s overall performance in the March quarter. For the first time in 13 years, Apple showed a decline.
“If you look at India, and each country has a different story a bit, but the things that have held not only us back perhaps but some others as well is that the LTE rollout with India just really began this year, and so we’ll begin to see some really good networks coming on in India,” Cook said in an earnings call.
The 4G rollout “will unleash the power and capability of the iPhone in a way that an older network, a 2.5G or even some 3G networks, would not do,” Cook added. Large parts of the US, Europe, and Asia already run 4G networks delivering high speed data services to customers.
Ambani, who chairs Reliance Industries, a gas-to-polyester conglomerate, in March called Reliance Jio the “world’s largest startup.” In the past, analysts have expressed concerns at the humungous investment and this has reflected in the price of Reliance shares.
Reliance owns the largest amount of liberalised spectrum among any Indian telecom provider, and its LTE and broadband services are expected to drive down data prices in India.

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Pranav Dixit is a writer of FactorDaily.