Reliance Jio sees wired broadband internet as the next battleground
Reliance Jio has initiated beta trials of its wired broadband service in Delhi and Mumbai, providing unlimited internet at 100 mbps for Rs4,500, and is likely to commercially launch the service by the end of 2018
New Delhi: After disrupting the wireless telecom sector, Mukesh Ambani’s Reliance Jio Infocomm Ltd is set to make fibre-to-home its next battleground with the formal commercial launch likely towards the end of this year.
“Jio’s main focus now is fibre to home...it has reached a sizeable base of wireless subscribers at 168 million...all efforts now are to successfully deploy wired internet to homes...the full-fledged commercial launch is likely to be announced on 28 December, which happens to be late Dhirubhai Ambani’s birthday,” a person familiar with the development said seeking anonymity.
Reliance Jio has already initiated beta trials for its wired broadband service across a few locations in the country. It has offered free broadband across regions in New Delhi and Mumbai, with unlimited internet at 100 mbps for a security deposit of Rs4,500.
“We are still deprived as a nation from a fixed mobile standpoint...we have only about 18 million connected homes in India...we would like to see at least 200 million,” Mathew Oommen, president of network, global strategy and service development at Reliance Jio, had said recently at the CNBC’s Indian Business Leaders Awards.
Brokerage firm CLSA India expects a Rs4,000-crore boost to Reliance’s earnings before interest, taxes, depreciation and amortization in three years on the back of the roll-out of broadband internet services, a Bloomberg report said.
The low penetration of wired internet services is another factor that could boost Jio’s efforts. According to Telecom Regulatory of India (Trai) data, as on 31 December, India had only 21.28 million wired internet subscribers, compared with 424.67 million wireless internet subscribers. In the wired internet segment, Bharat Sanchar Nigam Ltd (BSNL) holds a 52.53% market share with 9.38 million subscribers, followed by Bharti Airtel Ltd with a 10.12% market share and Atria Convergence Technologies Pvt. Ltd (ACT) with 6.02% share.
Jio’s focus on fibre also comes with the rise in data usage seen in the past year. According to data from Trai, for October-December 2017, the average data usage per subscriber per month was 1,945 MB, much higher than 878 MB in October-December 2016. To cash in on this surge in data, RIL recently announced an integration with leading music app Saavn for its digital music service JioMusic, apart from separately buying a 5% stake in film firm Eros International Plc.
“Given the huge demand for content, fibre is the better bet than wireless, which can provide only a fraction of the capacity of fibre. Fibre capacity can also be enhanced easily. However, fibre is a tough business: the fibre has to reach every single location physically. That is a nightmare, given the challenges of installing underground fibre. Permissions for digging involve huge costs and delays. However, those who do succeed can expect huge rewards from the market,” Mahesh Uppal, director at consulting firm ComFirst India, said.
Jio’s rival Airtel provides high-speed wired broadband up to 100 mbps to 2.1 million users across 89 cities in India. As of December end, Airtel’s average revenue per user from its ‘Homes Services’ segment was Rs948. Broadband customers account for 93.5% of its ‘Homes Services’ segment.
“Wired internet is not a pan-India game, Airtel has consciously only focused on regions where it saw good revenue coming in,” a person aware of the matter said.
Last week, Airtel also upped its game and introduced an all new superfast home broadband plan with speeds of up to 300 mbps at a monthly rental of Rs2,990 with 1,200GB of data. This plan also comes with free subscription to Airtel’s OTT apps—Wynk Music and Airtel TV.
Emails sent to Jio and Airtel seeking details of their broadband expansion plan were unanswered till press time.
Meanwhile, as bigger players capture the pie in metros, cable TV distribution company DEN Networks Ltd has shifted focus on small towns and will push its broadband offerings across tier 2 and tier 3 cities over the next three years by roping in local cable operators to use their existing infrastructure for last-mile delivery of internet.
“The tariff and stress of telcos is as of now is focussed on the main metros. So we have made the game plan for tier 2 and tier 3 cities. We don’t want to be trapped in this (war between telcos),” DEN Networks chief executive officer S.N. Sharma said in an interview.
According to Trai data, there are 156 internet service providers in the country as of December end and even without its formal presence in the wired internet segment, Jio has the lion’s share of overall internet subscribers with 35.9% of the market share followed by Bharti Airtel at 22.12%.
- India’s oil demand to climb to 500 million tonnes per year by 2040: Indian Oil
- Businesses offering card payment facilities more vulnerable to cybercrime: report
- Oil prices near 4-year high as producers resist output rise
- Yes Bank board to meet Tuesday after RBI directive on Rana Kapoor’s tenure
- Ratnagiri refinery: Indian Oil, others set up panel to settle land acquisition issues