The much-awaited JioFiber home broadband services will roll out in September with a starting price of Rs 700 a month. The fiber-to-home (FTH) offering comes with a lot of bundled services. Analysts feel this could lead to consolidation in the television distributor market, just as the telecom market was after the launch of Jio three years back.
Speaking at the annual general meeting of Reliance Industries (RIL), Chairman Mukesh Ambani said the investment cycle for Jio is now complete. “Unlike other industry players, your company had the foresight to pre-invest in the network assets,” he said. He added that because of early adoption of the ongoing enhancements to LTE technology, its wireless network was already ‘4G plus’ and it could be upgraded to 5G at minimum incremental cost. “Thanks to Jio’s converged network architecture, we can offer even faster fixed-line broadband to homes and business establishments today,” said Ambani.
With most of the investments now complete (the firm has invested Rs 3.5 trillion for digital infrastructure and fiber network), Ambani said the company will now fire the other engines of revenue generation – internet of things (IoT), home broadband, enterprise broadband and broadband for small and medium businesses.
Jio’s high speed broadband offering (starting speed of 100 Mbps which can go up to 1 Gbps) can have a positive impact on broadband penetration, analysts feel. Jio’s mobile offering had led to internet penetration in India breaching 90 per cent in line with global averages, said Karan Taurani, vice-president, research, Elara Capital. “The broadband penetration until now in India has been 10 per cent. Launch of Jio FTH will lead to surge in the number of users which will enable this penetration to multiply over the medium term in line with emerging nations (China’s FTH penetration is almost 70 per cent),” he added.
Jio sees a Rs 20,000 crore opportunity in the narrowband IoT (NBIoT) which it plans to use to tap into half of the 2 billion connected devices market over the next two years. Other telcos like Bharti Airtel and Vodafone Idea have also been vocal about their presence in the IoT market with both having rolled out some commercial proofs of concept and services.
In addition, companies like Tata Communications have already been in this space in India with its LPWAN network having already rolled out its network in 45 cities covering 215 million people.
Perhaps the most eyeball grabbing offering announced on Monday was Jio First-Day-First-Show — JioFiber customers will be able to watch movies the same day as their theatrical release. This feature, however, is on offer for its premium customers from the middle of 2020. Jio said the JioFiber subscription plans (which will come bundled with subscriptions of most OTT platforms), will range between Rs 700 and Rs 10,000. The company will share details on September 5.
Taurani said: “Jio’s plan to offer movies on a first-day-first-show basis won’t have a big negative impact on multiplexes as release of a movie in cinema is very important to get deals on digital and satellite.”
Ambani, however, said that customers should pay for one service — either voice or data, not both. Not only can a fixed line user on the Jio platform make free voice calls to any phone in India ‘forever’, but the company claims the tariff for home phones will be a fifth to a tenth of the existing industry rates. Also, there will be the offer of unlimited international calls to the US or Canada at Rs 500 a month.
JioFiber’s commercial roll out will trigger a second wave of activity in the fixed-line broadband market, dominated by a cross-spectrum of players. These include telecom operators (telcos) such as BSNL, MTNL and Airtel, cable companies such as Hathway and DEN Networks and pure-play broadband operators such as ACT and Spectra. The direct-to-home (DTH) and cable markets will be hit. It will also see consolidation with talks of Airtel DTH acquiring Dish TV gaining steam.
The last round of DTH consolidation was triggered in 2017 when Dish TV merged with Videocon d2H and Reliance Big TV was acquired by Delhi-based Veecon Media and Television.
On the other hand, the entry into IoT space is also backed by a parallel foray into data centres through a partnership with Microsoft. This will help Jio enter an enterprise business currently populated by the likes of Google, Amazon Web Services, Netmagic and CtrlS, among others.