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Jio's broadband service to impact MSOs, DTH players: Report

Press Trust of India  |  Mumbai 

Reliance Jio's recently announced offering will impact multiple system operators (MSOs) and direct to home (DTH) players, but will benefit content providers, a report said today.

"Jiogigafiber, a fibre-based service for homes and businesses, by has the potential to disrupt the retail segment and open up new digital avenues for the enterprise broadband segment," Ratings said in a report.

It said the level of impact on the MSOs and DTH players will depend on their geographical diversity with regard to subscribers, the relative attractiveness of the market, and current tariffs and service offerings.

The impact will be visible only in fiscal year 2019-2020 even though the service rollout is slated to happen from August 15 this year.

Aggressive posturing by for market penetration will be "credit negative" for existing players, it said.

RIL announced Jiogigafibre, the broadband offering, at its shareholder meeting last week but details such as the pricing are not yet revealed. The company plans to initially launch the offering in 1,100 cities.

It can be noted that the deep-pocketed Jio's entry has wrecked the telecom sector, resulting in mergers, bankruptcy filings, market withdrawals and profits plummeting for entrenched players. made voice, which contributed over 70 per cent of revenues, free, and started off by offering services for free and then announced aggressive plans.

The agency said penetration levels are low in as compared to other countries globally, with only 7 per cent of the 290 million households having fixed broadband and 180 million TV households.

It said Jio's target of 50 million households is only 18 per cent of the households, and "achievable".

At the current monthly broadband tariff of Rs 500-600 per household, the potential market size for 50 million households could be Rs 30,000-36,000 crore, significant portion of which could be tapped by Jio, it said.

The last mile connectivity will be a challenge for the country's largest corporate as it rolls out the fibre-based broadband offering, it said welcoming the phased rollout strategy which is planning.

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

First Published: Mon, July 09 2018. 18:50 IST
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