R-Jio, which will start operations later this year, has spent $14 billion so far, more than India’s third largest mobile phone operator Idea Cellular Ltd. India’s largest telcom company Bharti Airtel has invested $15.78 billion in India over the past 23 years of its existence, according to Capitaline and information obtained from the company’s analyst meeting held on 17 April. Data for Vodafone India Ltd, the nation’s second largest mobile phone operator, was unavailable. Anil Ambani’s Reliance Communications Ltd (R-Com) has invested $11.4 billion.

“Its (R-Jio’s) investments are now higher than Idea’s net investments ($12 billion) and within striking distance of Bharti’s, making it a formidable new entrant in the industry,” said a 20 April report by Morgan Stanley.

The total capital employed by R-Jio includes the money it spent on acquiring spectrum. It spent an additional $7 billion on building infrastructure, including laying fibre and setting up base stations, the report said.

The large investment is an indicator of the company’s strong conviction in its vision and its willingness to wait longer for returns, said Rohan Dhamija, a partner and head of India and South Asia at Analysys Mason, a telecom consulting firm.

“Unfortunately though, the higher capex (especially since a portion of it is related to spectrum), is also indicative of the fact that R-Jio hasn’t had the most well thought-out and capital efficient spectrum strategy historically, which it has tried partly addressing in the recent auctions, though that too came with an additional spend on newer bands” added Dhamija.

R-Jio is seeking to satiate the rising hunger for data from India’s 900 million mobile phone users who are consuming more videos, songs and games on the Internet. The company’s imminent entry into the fiercely competitive telecom market has also fuelled a renewed tariff war that may hurt profitability of Indian telecom companies.

Generating an adequate return on the investment that R-Jio has made will be challenging, analysts say.

The stand-alone return on invested capital (RoIC), or how effectively a company uses capital invested in its operations, for Airtel stood at 11.8% at the end of fiscal 2015, according to Bloomberg data. For Idea Cellular, RoIC was at 8.16%.

“A huge capex does not guarantee that you will be a profitable player. A huge capex only shows that the company has money to invest. There is no roadmap for value proposition and that is what is worrying the investors,” said an analyst with a domestic brokerage. He did not want to be named due to internal policies of his company.

Matching the margins made by existing telecom firms will be the big challenge, said another analyst.

“In the Indian telecom space, a company which crosses a revenue market share of 20% in the domestic market manages a margin within 20-30%. A company with a revenue market share of 10% manages to just break even. This is the trend in India,” the analyst cited above said.

He said it will not be easy for R-Jio to reach even a 10% market share in five years of operations and could lead to huge losses during the initial years.At an analyst meet on 17 April, RIL executives declined to share information about rollout plans, saying that the details will be shared at the company’s annual general meeting in June.

An email sent to RIL on Thursday remained unanswered.

Mint had reported on 14 April that the company is readying itself to launch its mobile business in select cities from June-end, while the fibre-to-home business will take more time.