 "Reliance Jio")
After its success in mobile telephony, Reliance Jio is preparing to disrupt the market once again. This time in the fixed broadband and television (TV) space.
The Mukesh Ambani-led company will launch high-speed fibre to the home (FTTH) broadband in more than 30 cities early next year, to offer TV as well as internet to subscribers, it is learnt.
Jio has mapped out a plan to address over 100 million TV households across these cities, including Tier II and III, by ensuring dense fibre presence for last-mile connectivity to homes. In the first phase itself, at least 50 million households will be offered the service, according to sources in the know.
Jio has already spread out over 300,000 kilometres of optic fibre (half of which is through a long-term contract with Anil Ambani’s Reliance Communications).
In fact, Reliance Industries Chairman Mukesh Ambani, in his annual general meeting speech this year, indicated that Jio was on track to offer high-speed broadband services. The infrastructure was in place and it would be the next big monetisation opportunity for the company, he had said.
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Jio is eyeing an average revenue per user of around Rs 1,000 to Rs 1,500 per month from subscribers (which includes internet and TV), as their usage of data goes up, a source said.
A Jio spokesperson declined to comment on the FTTH plan.
Currently, Jio is learnt to be running a trial offer in limited markets in Mumbai and Delhi, with only internet services at speeds of 100 megabits per second and 100 gigabytes of data free of cost. It is providing a special router, which connects multiple devices at a refundable deposit of Rs 4,500. With a multi-service operator (MSO) licence in place, it will also offer TV services.
Jio is planning to leverage technology to resolve some of the problems of FTTH. For instance, it’s likely to use power-line communicators - a small plug-and-play device that extends the strong WiFi signal to rooms far away from the router. While FTTH can get problematic in large homes and offices, Jio’s working on a strategy to use existing electric wiring to transmit data and TV signals across the house.
However, competitors such as MSOs and direct-to-home (DTH) operators argue the jury is still out on whether this gamble will work and if Jio can actually replicate the success in mobility once again.
Representatives of conventional TV industry cite numbers to back their claim that this is a tough game. While there are 180 million TV households in the country, subscribers fork out an average of only Rs 300- 400 a month for as many as 400 to 500 channels currently, they say. “Subscribers using cable or DTH do not have to pay the cost of broadband as well as indirectly that of spectrum. Anyone looking at an average three hours of TV will need to pay anything between Rs 1,000 and Rs 1,500; it includes broadband costs in the case of Jio.” The question is how many users will pay three to five times more, even if it is for a better service, a prominent MSO asked.
Competitors also say that currently, only three million subscribers cough up over Rs 1,000 for high-speed broadband internet and only two million rustle up a similar amount per month for DTH or cable. So, the market that Jio is looking to address is currently niche and a small one.
“Deploying FTTH is an expensive business and obviously Jio is making large investments. So, they have to get an adequate return on their investments. They might offer broadband free like they are doing currently and they did earlier in the mobile space,” said a top executive in the business. But they will have to increase tariffs to make money and that might not translate into mass adoption.
“But at least someone is trying,” the executive said. And, if the experiment succeeds, the number of households with TV and broadband, currently growing very slowly, could just explode, he said.
